In November 2025, FASB issued ASU 2025-08, finally addressing this issue by expanding the “gross-up” approach to a new category of assets: Purchased Seasoned Loans (PSLs).
This webinar provides a comprehensive deep dive into the new standard. We will move beyond the theory to discuss practical implementation strategies.
We will explore how to identify “seasoned” loans, the mechanics of the gross-up approach (formerly reserved only for PCD assets), and the strategic impact this will have on M&A and loan portfolio acquisitions.
What You’ll Learn
- Differentiate legacy non-PCD from new Purchased Financial Asset (PFA) accounting to eliminate the “Day 1 double count” of credit losses.
- Review seasoning criteria (90-day rule, lack of acquirer involvement) to correctly classify acquired loans as eligible PSLs or new originations.
- Identify the “gross-up” method to calculate initial amortized cost and record Day 1 journal entries for seasoned loans.
- Assess operational and strategic implications of early (2026) vs. mandatory (2027) adoption, including data and policy updates.
- Quantify the new standard’s financial statement impact on post-acquisition earnings, capital, and yield via case studies.
- Evaluate the optional accounting policy election for subsequent measurement to determine if aggregating purchased and originated loans outweighs a one-time provision true-up.
Webinar details
For years, financial institutions have struggled with the “double counting” effect under CECL, where the acquisition of non‑PCD (Purchased Credit Deteriorated) loans triggered an immediate Day 1 provision expense—even though credit risk was already priced into the fair value of the loan.
