How to prepare for the new AFS debt securities accounting rules
How to prepare for the new AFS debt securities accounting rules
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How to prepare for the new AFS debt securities accounting rules

‘Credit loss’ filters can simplify compliance

New accounting rules that call for revised accounting and reporting related to credit losses on “available for sale” (AFS) debt securities will impact nearly every bank and insurance company, as well as many other entities that hold AFS debt securities. The rule, which goes into effect as early as January 2020, requires holders of AFS debt securities to consider new processes, controls, accounting, and reporting for all AFS debt securities that are in a loss position (i.e., fair value is less than amortized cost).

This accounting change creates additional, and potentially labor-intensive, compliance requirements to address the new standard. KPMG LLP’s new paper discusses how setting up credit loss filters via technology and automation allows security holders to more efficiently and effectively identify AFS debt securities that are in a loss position, calculate the credit loss amounts, isolate disclosure amounts, and ease compliance and operational burdens.

Download to read How to prepare for the new Available-for-Sale debt securities accounting rules.