Global Definitions Database

An expected credit loss accounting standard issued by the Financial Accounting Standards Board (FASB) in 2016, which introduced new methodology for estimating allowances for credit losses; under the accounting standard, financial institutions are required to use historical information, current conditions and reasonable forecasts to estimate the expected loss over the life of a loan; effective for most Securities and Exchange Commission (SEC) filers in fiscal years and interim periods beginning after December 15, 2019, and for all others it takes effect in fiscal years beginning after December 15, 2022.