Case: The Future of Measuring Expected Credit Loss

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During 2013, the FASB directed its staff to move forward with the
drafting of an impairment standard containing a “Current Expected Loss
(CECL) Model” with the purpose to better disclose to corporate
stakeholders a net realizable measurement for financial assets and
liabilities. This FASB measure came about specifically to address the
concerns from the Great Recession regarding the true net value of
long-term financial assets, like mortgage loan assets held by financial
institutions and traded debt, such as the $30 billion in mortgage debt
sold to the public during 2008 before it went bankrupt. Currently, Jed
Miller is the corporate controller for ABC Corporation looking to
purchase high-yielding Citibank mortgage assets at low market price.

Required: As an accountant of ABC Corporation, after
reading the two articles in required reading and locating two
additional peer-reviewed sources on the topic, provide an appraisal of
the expected loss model for Mr. Miller of the CECL. Be sure to compare
it to the allowance for doubtful accounts for accounts receivables and
address the huge monetary loss the CECL model might have saved ABC
Corporation, who purchased Lehman mortgage assets in 2008.

Your well-written paper must be 8-10 pages, in addition to title and
reference pages. The paper should be formatted according to the APA Requirements Cite at least five peer-reviewed or academic sources, in addition to the required reading for the module.

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