According to SNL Financial, a controversial accounting proposal that would require banks to recognize, upfront, potential losses on loans is nearing completion and officials at the FASB now expect to finalize the rule late this year.

SNL notes the proposal is aimed at providing investors clarity on banks’ expectations on losses for the life of loans. But many bankers and their advocates are highly dubious, arguing that such forecasting is ultimately guesswork, and that the change would needlessly cut into capital levels and lower earnings, SNL said.

To read the full SNL report click here.

Previously on monitordaily:

Majority of Banks Not Prepared to Meet ALLL Requirements (August 24, 2015).

IASB Issues Loan Loss Reporting IFRS 9 (August 5, 2014).