Tuesday, November 27, 2018

FASB Proposes Improvements to Financial Instruments Standards

US Financial Accounting Standards Board

In connection with its ongoing agenda project to improve the FASB Accounting Standards Codification™, the US Financial Accounting Standards Board (FASB) has issued the proposed Accounting Standards Update (ASU), Codification Improvements—Financial Instruments. The FASB intends the proposed amendments to clarify and improve areas of guidance related to recently issued standards on financial instruments and hedging. The comment due date is 19 December 2018.

The proposals include amendments to the following areas:

  • Topic 1: Codification Improvements Resulting from the June 11, 2018 Credit Losses Transition Resource Group (TRG) Meeting, covering issues related to accrued interest, transfers between classifications or categories for loans and debt securities, and recoveries
  • Topic 2: Codification Improvements to ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, including conforming amendments, reinsurance recoverables, projections of interest rate environments for variable-rate financial instruments, prepayments in determining the effective interest rate, and estimated costs to sell when foreclosure is probable
  • Topic 3: Codification Improvements to ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, and other hedging items, including partial-term fair value hedges of interest rate risk, amortisation of fair value hedge basis adjustments, disclosure of fair value hedge basis adjustments, other hedging issues, and transition guidance
  • Topic 4: Codification Improvements to ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, including scope clarifications, held-to-maturity debt securities fair value disclosures, applicability of Topic 820 to the measurement alternative, and remeasurement of equity securities at historical exchange rates
  • Topic 5: Codification Improvements Resulting from the November 1, 2018 Credit Losses TRG Meeting, covering vintage disclosures—line-of-credit arrangements converted to term loans and contractual extensions and renewals.

The proposed ASU is available on this link

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