Table of Contents
Objective5
Background5
| Previous GAAP- Incurred Loss Model (Pre- 2023) | 5 |
| New ASC 326, Financial Instruments- Credit Losses | 9 |
| Recent FASB ASUs Targeted at ASC 326's Credit Losses | 10 |
ASU 2016-13 Amendments11
ASC 326-20 Expected Credit Loss Model11
| Overall Scope of ASC 326-20 | 11 |
| General Amendments to ASC 326-20 Made by ASU 2016-13 | 12 |
| New Expected Credit Loss Model | 13 |
| Subsequent Measurement -Reporting Changes in Expected Credit Losses | 18 |
| Financial Statement Presentation of Allowance Balance and Activity | 19 |
| Loans and Trade Receivables- Common Control | 19 |
| Examples from ASU 2016-13 | 22 |
| Financial Assets Secured by Collateral | 35 |
| Purchased Financial Assets With Credit Deterioration NEW per ASC 326-10 | 39 |
| REVIEW QUESTIONS | 39 |
| SUGGESTED SOLUTIONS | 42 |
Held-to-Maturity Debt Securities- ASC 326-2044
| Basic GAAP Rules- Debt Securities-ASC 320 | 44 |
| Held-to-Maturity (HTM) Debt Securities and ASC 326-20 | 45 |
| HTM Debt Securities and the Expected Credit Loss Model in ASC 326-20 | 45 |
| Investments in Certificates of Deposit (CDs) and Money Market Accounts | 50 |
Available-For-Sale Debt Securities- Impairment- ASC 326-3051
Implementation of ASU 2016-1355
| REVIEW QUESTIONS | 58 |
| SUGGESTED SOLUTIONS | 60 |
Sample Disclosures- ASU 2016-1362
INDEX87
GLOSSARY88
Course Details
Author: Steven C. Fustolo, CPA
Mr. Fustolo is a partner with the Boston CPA firm of James J. Fox & Company and Director of the National Tax Institute, Inc. He is a frequent lecturer and author of numerous tax and accounting issues affecting closely held businesses. An AICPA author, Mr. Fustolo’s articles are regularly featured in The Practical Accountant and other publications. He is the author of Practice Issues: Compilation and Review, Accounting and Auditing Reference Guide, Everything You Never Wanted to Know About GAAP, Enron: Fraud, Deception and the Aftermath, FASB Review for Industry, and FASB, SSARS and SAS Update and Review and numerous other books and manuals that have been published by Practitioners Publishing Company (PPC) and Commerce Clearing House (CCH). He is the recipient of several Outstanding Discussion Leader awards from many professional organizations including the New York and Florida Societies of CPAs. Mr. Fustolo’s course entitled FASB, SSARS and SAS Update and Review continues to receive accolades and is regarded as one of the top live CPE programs in the country today with ratings that average 4.91 on a scale of 5.0. He speaks regularly for professional groups including being a guest lecturer at the AICPA Advanced Accounting and Auditing Technical Symposium. Mr. Fustolo is the recipient of the Elijah Watts Sells Award (AICPA) and Silver Medal (Massachusetts) for scores received on the CPA Examination.
Publication/Revision Date: 1/19/2026
Course Exam Questions (online): 10 (multiple-choice)
Program Delivery Method: NASBA QAS Self-Study
Available Formats of Course Text: PDF only or PDF plus printed copy sent in the mail
Course Level, Prerequisites, and Advance Preparation Requirements
| License | Course Level | Prerequisites | Advance Preparation Requirements |
|---|
| CPA | Overview | None | None |
* This program is appropriate for professionals at all organizational levels.
Sponsor ID Numbers
National Registry of CPE Sponsors ID: 107615
State CPA Board Sponsor ID Numbers (where applicable)
Florida Division of Certified Public Accounting: 0004761
Hawaii Board of Public Accountancy: 14003
New York State Board for Public Accountancy: 002146
Ohio Accountancy Board: CPE .51 PSR
Pennsylvania State Board of Accountancy: PX178025
Texas State Board of Public Accountancy: 009349
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Recognize examples of assets that are and are not subject to the ASC 326-20 expected credit loss model
- Recognize the model that ASU 2016-13 uses to deal with credit losses
- Recall how an entity should present the new allowance for credit losses on the balance sheet
- Identify examples of entities that are under common control
- Recognize two elections that can be made under ASU 2025-05
- Recall how subsequent collections of trade receivables are measured in the year-end allowance balance
- Identify how a decline in a held-to-maturity debt security is accounted for
- Recognize the new impairment model for available-for-sale debt securities under ASC 326-30
- Recognize some new and not new disclosures under ASU 2016-13
