As you build your 2026 and early 2027 accounting priorities, the FASB’s ASU 2025-08 on purchased loans remains highly relevant for institutions that acquire loan portfolios or contemplate mergers. The standard expands the reach of the gross-up approach under ASC 326 to include loans that meet the criteria for purchased seasoned loans. That change is effective for fiscal years beginning after December 15, 2026, with early adoption still available.   

Context and Why It Matters Now 

Years into CECL implementation, many institutions are still wrestling with accounting treatment and internal controls for acquired assets. CFOs and controllers consistently tell us that the dual model for purchased credit-deteriorated (PCD) assets and non-PCD assets created operational complexity and inconsistent results. ASU 2025-08 responds to that feedback by broadening the gross-up method beyond PCD assets to a defined subset of non-PCD loans.   

This matters because it aligns accounting outcomes more closely with economic reality. Instead of recognizing a Day-1 credit loss expense for certain acquired loans, institutions will embed expected credit losses into the loan cost basis. That change enhances comparability across banks and reduces one-off earnings volatility associated with acquisitions.   

What CFOs Should Focus On 

• Clarity on purchased seasoned loans. Loans outside the PCD definition now qualify for gross-up if acquired more than 90 days after origination, and the buyer was not involved in origination, or if acquired through a business combination accounted for under ASC 805.   

• Day-1 economics. The standard eliminates the immediate credit loss expense for these loans, which can materially affect acquisition accounting, pro forma earnings models, and capital planning.   

• Policy and controls. Judgment remains in scope assessment. Developing written procedures and controls to evaluate involvement in origination and seasoning criteria will reduce audit friction and support consistent application.   

• Optional measurement paths. Where non-discounted cash flow methods are used, you may elect to measure expected credit losses on the amortized cost basis instead of unpaid principal. This choice influences how ACL roll forwards and yield calculations behave in post-acquisition periods.   

Timing and Transition Realities 

The effective date places preparation for the impact of this standard squarely in your 2026 planning cycle, with impacts on 2027 reporting and beyond. Early adoption remains an option if your institution sees value in aligning acquisition accounting ahead of mandatory compliance.   

Where CFOs Typically Seek Support 

In our conversations with finance leaders, three themes recur: aligning accounting and credit risk assumptions, integrating the new standard into merger models, and preparing investors and auditors for reporting under the updated framework. Those are not box-checking exercises. They require judgment on policies, assumptions and auditor dialogue that anticipates scrutiny rather than reacts to it. 

If you are evaluating how ASU 2025-08 affects your acquisition economics, allowance strategies, or internal reporting frameworks, we can help you navigate those decisions alongside your teams.