Don’t Forget About Me: Debt Securities

Under ASU 2016-13, credit loss measurement differs depending on the debt security’s classification: held-to-maturity (HTM) or available-for-sale (AFS) based on management’s investment intentions. HTM debt securities, will fall under the CECL model of the ASU. This may potentially require institutions to recognize at adoption and on an ongoing basis, credit losses on certain HTM debt securities which under current guidance would currently have no credit impairment. Presenters will also discuss the impact of ASU 2016-13 on AFS debt securities compared to today’s other than temporary impairment model in terms of what remains the same; key differences; and quantitatively vs. qualitatively assessing whether credit loss exists.