Alert: FASB Accounting Standards Update No. 2018-19 – Codification Improvements to Financial Instruments – Credit Losses

Category: US GAAP

Alert: FASB Accounting Standards Update No. 2018-19 – Codification Improvements to Financial Instruments – Credit Losses

On November 15, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-19 Codification Improvements to Topic 326, Financial Instruments – Credit Losses to amend the transition requirements and scope of the credit losses standard.

The amendments resulting from this ASU are summarized as follows:

  • The ASU mitigates transition complexity by requiring non-public business entities to implement the amendments in ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments for fiscal years (including interim periods therein) beginning after December 15, 2021, without making a cumulative-effect adjustment to opening retained earnings as of January 1, 2021, as required by Topic 326.
  • The ASU clarifies that receivables arising from operating leases are not within the scope of Topic 326. The impairment of receivables arising from operating leases will be accounted for in accordance with Topic 842, Leases.

The effective date and transition requirements for the amendments in this ASU are the same as those in Topic 326.

To access the full script of ASU No. 2018-19, click here.

To access the full script of ASU No. 2016-13, click here


This communication contains a general overview of the topic and is current as of January 5, 2019. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional, who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person’s use of or reliance upon this material. © MNP LLP 2019. All rights reserved.


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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.