In October 2008, the U.S. Financial Accounting Standards Board and the International Accounting Standards Board established the Financial Crisis Advisory Group as part of a joint approach to address the credit-loss reporting issues arising from the global financial crisis and an ongoing effort to unify U.S. and international standards.  In July 2009, the FCAG published a report, recommending alternatives to the incurred loss model that would use more forward-looking information. After working on separate models to address the FCAG recommendations, FASB and IASB published a joint proposal known as the three-bucket impairment model in 2011.

In July 2012, FASB began to express concerns about the complexity of the three-bucket approach, leading it to propose and issue for public comment “current expected credit-losses model.” In March 2013, the IASB responded by introducing its own “credit deterioration model.”

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Tonya Knudesn


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