The International Accounting Standards Board's credit loss exposure draft differs from the model the Financial Action Standards Board has proposed in the U.S., but according to the World Council of Credit Unions, it is likely to result in similar losses.
While FASB's proposed credit loss model would require credit unions to recognize losses expected over the lifetime of a loan or asset, the IASB's approach would only require provisioning for 12 months' worth of losses.
Nonetheless, the World Council said in its July 5 comment letter, the international credit union trade association said it questions the need to move from the current incurred loss standards to the expected loss model.
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