The Financial Accounting Standards Board has released a long awaited accounting standards update for credit losses. This is Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

Earlier reporting: Financial statements will have to show credit losses on loans and other financial instruments in a more timely fashion under the new standard. Entities will be required to measure all expected credit losses for financial assets held at the reporting date. “Financial service entities will be heavily affected,” says PwC in a report. “However, given its broad scope, which includes trade and lease receivables, all entities will need to evaluate the ASU’s impact.” PwC will host a webinar to explain the new standard on July 25.

The ASU is effective for U.S. SEC filers for fiscal years beginning after Dec. 15, 2019, and later for other entities.