Skip to main content

Tagging Allowance for Credit Loss Write-Offs and Credit Quality Indicator in Notes to the Financial Statements

Aug. 11, 2023

Staff in the Commission's Division of Economic and Risk Analysis has completed an assessment of how filers are tagging write-offs for their allowance for credit loss and their credit quality indicator disclosures in their Form 10-K. The assessment was performed on only those filers that have financing receivables and follow Accounting Standards Codification (ASC) Topic 326, Financial Instruments - Credit Losses, published by the Financial Accounting Standards Board.

Staff has observed that some filers disclosing write-offs related to their allowance for credit loss tagged the write-offs with elements referencing ASC Topic 310 (e.g., AllowanceForLoanAndLeaseLossesWriteOffs), which must not be used to tag disclosures that are reported under ASC Topic 326. The U.S. Generally Accepted Accounting Principles (GAAP) Financial Reporting Taxonomy includes Transition Taxonomy Implementation Notes [1] (e.g., see Transition Taxonomy Implementation Note for AllowanceForLoanAndLeaseLossesWriteOffs) for these elements indicating that they should not be used once Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses [2] is applied. Staff has also observed that some filers created custom tags for these write-off disclosures. Filers must instead use one of the elements from the U.S. GAAP Financial Reporting Taxonomy intended for tagging write-off disclosures of allowance for credit loss which reference ASC Topic 326 (e.g., FinancingReceivableAllowanceForCreditLossesWriteOffs).

Staff also observed that filers are creating custom tags for the tabular disclosure of credit quality indicators. Filers must instead use the element FinancingReceivableCreditQualityIndicatorsTableTextBlock from the U.S. GAAP Financial Reporting Taxonomy for that table.

For more information on elements related to ASC Topic 326, please refer to the FASB's taxonomy viewer for the U.S. GAAP Financial Reporting Taxonomy. For more data quality reminders, see Staff Observations, Guidance, and Trends.

[1] Transition Taxonomy Implementation Notes assist filers with element selection upon adopting an ASU.

[2] Modifications to ASC content are published through each ASU, which specifies the changes being made for a particular topic. ASU 2016-13 is related to ASC Topic 326.

Return to Top