ASU 2016-13 | KPMG and SAS joint offering

Securities credit loss accounting and disclosure automation

Chris Boyles

Chris Boyles

Partner, Risk Analytics, KPMG US

+1 213-955-8484

ASU 2016-13 removes Other-than-Temporary Impairment (OTTI) on impaired securities and requires a credit loss allowance equal to the difference between discounted cash flows and the security’s amortized cost basis. Furthermore, for AFS classified securities, credit loss allowance is limited to the fair value of the security. For HTM classified securities, new guidance requires forward-looking assumptions and reversion to historical loss information.

Import securities data and accounting information, generate allowance for credit loss amounts and create JE postings, produce financial statement disclosure tables as required under ASU 2016-13, all through a controlled production environment.

This web-based user-friendly offering enables organizations to leverage their existing securities systems of record, automate application of credit loss accounting filters and purchased credit deteriorated test filters per policy papers, calculate a security’s respective allowance for expected credit losses, and automate the process of generating accounting general ledger journal entries and financial statement disclosure tables. The offering can be deployed on-premises or hosted in a cloud environment. Alternatively, remote managed services under a subscription can be offered where KPMG performs the process on behalf of the organization, with back-end operations powered by SAS.

Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. Any trademarks or service marks herein are the property of their respective owners.