Measurement of Credit Losses for Accounts Receivable and Contract Assets for Private Companies and Certain Not-for-Profit Entities (BDO Comment Letter)
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In December 2024, the Board proposed amendments to Topic 326, Financial Instruments — Credit Losses (CECL), with respect to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers, for private companies and certain not-for-profit entities (NFPs). The FASB expects the proposed amendments to reduce the time and effort of estimating credit losses for current accounts receivable and current contract assets without reducing the decision usefulness of this information for investors and other financial statement users.
In our comment letter, BDO supported the Board’s proposal to provide certain nonpublic entities with accounting elections when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. BDO also suggested expanding the scope of the proposed amendments to include all entities.