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Mind the GAAP: What Recent Changes in US GAAP Accounting Mean for Borrowers and Lenders

5324
Duration : 60 Minutes

Dev Strischek,

A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Dev is principal of Devon Risk Advisory Group and engages in consulting, speaking and training on a wide range of risk, credit, and lending topics. As former SVP and senior credit policy off Read more


Much of the change in GAAP in recent years is the result of collaboration between the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) to bring US and international accounting principles closer together.  At some point, both groups decided they were as close as they would be likely to get on several key concepts—revenue recognition, lease capitalization, and CECL.  In addition, FASB decided to revise financial statement disclosure for the large and growing not-for-profit segment of the American economy.

This session will explain these new concepts and how they affect borrowers and how lenders should incorporate these changes into their own analyses and underwriting of borrowers.

Course Objectives:

• Explain how efforts to converge international accounting and US accounting led to several significant accounting changes

• identify recent additions to generally accepted accounting principles—revenue recognition, lease capitalization, current expected credit loss, changes to non-profit accounting

• summarize each addition and how it affects financial accounting of borrowers and impacts their repayment ability

Why Should You Attend:

We tend to take accounting for granted—debits equal credits, total assets equal total liabilities and stockholder’s equity.  Generally accepted accounting principles (GAAP) are generally accepted because they do not change often, and when they do, there are good reasons for the change.

However, business and the economy do change over time, and several new principles warrant review to understand how they will affect both borrowers and lenders--new GAAP for revenue recognition, lease capitalization, current expected credit losses (CECL) as well as changes to not-for-profit financials.

Course Outline:

• Background of FASB and IASB accounting convergence

o Close, but no cigar

o Differences still exist

• Revenue recognition

o Seller recognizes revenue when buyer gets possession of good or service

o Generally sooner than later

o More emphasis on gross revenues 

• Lease capitalization

o Troublesome off-balance-sheet loophole finally plugged

o Whether operating or financing lease, both are capitalized 

o Both lease liability and right of use (ROU) asset put on balance sheet

o Higher leverage ratios, lower return on asset ratios

o Cash flow impacts

• CECL

o Incurred loss replaced by loss over life of loan

o Higher probability of default

o CECL means higher provision for credit losses in financials of borrowers, not just bankers

• Not-for-profits

o Balance sheet simplified

o More disclosure of liquidity

What You Get:

• Training Materials

• Live Q&A Session with our Expert

• Participation Certificate

• Access to Signup Community (Optional)

• Reward Points

Who Will Benefit:

• Credit Managers

• Credit Analysts

• Loan review officers

• Work-out officers

• Commercial lenders

• Credit Risk Managers

• Chief Credit Officers

• Senior Lenders

• Senior Lending Officer

• Bank Director

• Chief Executive Officer

• President

• Board Chairman

• Accounting and finance department

• Chief financial officer

Please reach us at 1-888-844-8963 for any further assistance or if you wish to register

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Subject : Mind the GAAP: What Recent Changes in US GAAP Accounting Mean for Borrowers and Lenders


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