Due 4/12/15
Case:
The Future of Measuring Expected Credit Loss
During 2013, the FASB directed
its staff to move forward with the drafting of an impairment standard
containing a “Current Expected Loss (CECL) Model” with the purpose to better
disclose to corporate stakeholders a net realizable measurement for financial
assets and liabilities. This FASB measure came about specifically to address
the concerns from the Great Recession regarding the true net value of long-term
financial assets, like mortgage loan assets held by financial institutions and
traded debt, such as the $30 billion in mortgage debt sold to the public during
2008 before it went bankrupt. Currently, Jed Miller is the corporate controller
for ABC Corporation looking to purchase high-yielding Citibank mortgage assets
at low market price.
Required:
As an accountant of ABC
Corporation, after reading the two articles in required reading and locating
two additional peer-reviewed sources on the topic, provide an appraisal of the
expected loss model for Mr. Miller of the CECL. Be sure to compare it to the
allowance for doubtful accounts for accounts receivables and address the huge
monetary loss the CECL model might have saved ABC Corporation, who purchased
Lehman mortgage assets in 2008.
Paper must be 8-10 pages
Include 5 sources beside the one included – Cite at least 5
peer-reviewed sources with in-text
cites of where the information was used…If you tell me where it was used I will
add the in-text citation
Reference
Proposed Accounting Standards Update (ASU), Financial
Instruments–Credit Losses (ASC 825-15) (Part 2). (cover story).
(2013). GAAP Update Service, 13(4), 1-8.
In-Text: (“Proposed accounting standards,” 2013)
Weiss, J. (2013). Proposed accounting standards update: (ASU), Financial instruments–Credit losses (ASC
825-15) (Part 1). (cover story). GAAP
Update Service, 13(3), 1-8.
In-Text:
(Weiss, 2013)
Schroeder, R. G., Clark, M. W.,
& Cathey, J. M. (2014). Financial accounting theory and
analysis: Text and cases.
(11 ed.). Hoboken, NJ : John Wiley & Sons. Retrieved from http://www.coursesmart.com/9781118582794/firstsection
In-Text: (Schroeder, Clark &
Cathey, 2014)
The paper should be formatted according to the APA
Requirements
