18. During its adoption of the new accounts receivable credit losses standard (ASC 326-20), a company...

 

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18. During its adoption of the new accounts receivable credit losses standard (ASC 326-20), a company considered whether to revise its method for determining the allowance for credit losses. Ultimately, the company decided to continue using an aging schedule to estimate its allowance, as opposed to adopting a different method (such as a discounted cash flow method, loss-rate method, roll-rate method, etc). The company rationalized that it should continue its current method unless there was a compelling reason in the guidance to change. 18. During its adoption of the new accounts receivable credit losses standard (ASC 326-20), a company considered whether to revise its method for determining the allowance for credit losses. Ultimately, the company decided to continue using an aging schedule to estimate its allowance, as opposed to adopting a different method (such as a discounted cash flow method, loss-rate method, roll-rate method, etc). The company rationalized that it should continue its current method unless there was a compelling reason in the guidance to change.

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