CMA Study Group

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  • 1.  A/Cs Rcvble - Sec A Part 1

    Posted 9 days ago

    ASC 326-20-35-1 states the following:

    "At each reporting date, an entity shall record an allowance for credit losses on financial assets . . . An entity shall report in net income (as a credit loss expense or a reversal of credit loss expense) the amount necessary to adjust the allowance for credit losses for management's current estimate of ex- pected credit losses on financial asset(s)."

    So i know if i need to create a credit expense, it will go through Income statement under head - Credit Loss Expense.

    My question is about a reversal of credit loss expense:
    1. Does it need to belong to only current period?
    2. Will it be added to this year's net income if credit loss is recovered from past years?

    Nupur Mahajan
    Hartford CT United States

  • 2.  RE: A/Cs Rcvble - Sec A Part 1

    Posted 7 days ago
    Credit losses or reversals of credit losses are estimates. Therefore, a reversal is recorded in the current period even if it relates to prior period income. It is not an error and would not result in a prior period adjustment.

    Jeanne David
    University of Detroit Mercy
    Farmington Hills MI
    United States

  • 3.  RE: A/Cs Rcvble - Sec A Part 1

    Posted 6 days ago
    Add me to CMA part 2 group.