CMS Sept 2022

Internal Use Only

AFS Securities

Current U.S. GAAP • Credit losses recognized through a direct write ‐ down of the amortized cost basis • Credit losses can exceed total unrealized losses • No immediate reversals of previously recognized credit losses

New Accounting Standard • Allowance approach • Fair value floor for credit losses • Allows immediate full or partial reversals of previously recognized credit losses, as appropriate

2019 New Accounting Standard on Credit Losses: Frequently Asked Questions

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Internal Use Only

2019 New Accounting Standard on Credit Losses: Frequently Asked Questions

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