The Financial Accounting Standards Board finished April with two more Accounting Standards Updates to reflect some narrow but sticky implementation issues tackled by the board’s Emerging Issues Task Force.

The board published Accounting Standards Update No. 2010-18 to address how financial institutions should account for bad loans they have acquired as part of a pool when some loans in the pool have been modified. The EITF recommended and FASB adopted a method that would spare banks the onerous task of pulling loans out of the pool and accounting for them individually as a debt restructuring, said Mark LaMonte, managing director at Moody’s and a member of the Emerging Issues Task Force.

“I don’t think this is going to have a very material impact on the numbers banks are reporting and there are no specific disclosure requirements,” LaMonte said. As such, the change won’t be terribly significant for users of financial statements, he said.

The board also issued Accounting Standards Update No. 2010-17 to explain how companies with transactions involving research and development should follow the “milestone method” of recognizing revenue on such transactions.

The scope of the guidance is narrow, said LaMonte. “This is an accounting policy election, so there is no requirement to adopt,” he said. “Practice today is diverse but in many cases may already be aligned with the model in the ASU, so it’s not clear to me this is going to have a dramatic impact on the timing of revenue recognition for the small set of companies this applies to.”

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