Purchased seasoned loans: A guide to simplified compliance & early-adoption benefits
FASB’s ASU 2025-08 introduces a new purchased seasoned loan (PSL) classification and gives acquisitive institutions a rare chance to reverse previously recognized provision expense.
Early adopters may see a meaningful earnings benefit, yet the window for opportunity is short, and recalculations required for Day 1 amounts, yields, and allowances add complexity and pressure. This guide excerpts the new guidance and explains it in practical terms, detailing the steps to implement the standard efficiently, apply the requirements accurately, and avoid common pitfalls. Position your institution to capture the full benefit of adoption.
You will learn:
- What loans qualify as PSLs
- How to reverse previously recognized provision expense correctly
- How to implement the standard efficiently and accurately
- How to document key adoption decisions and calculations
