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?



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    Nupur Mahajan
    nupur1188@...
    Hartford CT United States
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  • 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.

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    Jeanne David
    Academic
    University of Detroit Mercy
    Farmington Hills MI
    United States
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  • 3.  RE: A/Cs Rcvble - Sec A Part 1

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