FASB proposed an Accounting Standards Update on codification improvements, which covers proposed modifications for topics such as credit losses, derivatives and hedging, fair value measurement, financial Instruments, and leases. The codification updates include technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements. The comment period for this proposal ends on December 26, 2019. Within the exposure draft, the “Amendments to the FASB Accounting Standards Codification” section contains a chart identifying the topics, paragraphs, and the nature of amendments being proposed. Additionally, FASB proposed taxonomy improvements in relation to the proposed Accounting Standards Update on codification improvements. The comment period on the proposed taxonomy improvements ends on January 03, 2020.
The amendments in the proposed update would affect a wide variety of topics in the Codification, including the following:
- Amendments to Subtopic 326-20 on Credit Losses. The proposed amendments would align the contractual term to measure expected credit losses for a net investment in a lease under Topic 326 to be consistent with the lease term determined under Topic 842 on leases.
- Amendments to Subtopic 815-20 on Derivatives and Hedging. Paragraph 815-20-25-79(a) states that the calculation technique described earlier in the paragraph is consistent with the definition of the term expected cash flow in Concepts Statement 7. It is proposed to amend paragraph 815-20-25-79, with no link to a transition paragraph.
- Amendments to Subtopic 820-10 on Fair Value Measurement. The proposed amendments would clarify the applicability of the portfolio exception in Subtopic 820-10 to non-financial items accounting for as derivatives under Topic 815
- Amendments to Subtopic 825-10 on Financial Instruments. The proposed amendment would clarify that nonpublic business entities are subject to the fair value option disclosures in paragraphs 825-10-50-24 through 50-32.
- Amendments to Subtopic 840-30 on Capital Leases. Paragraph 840-30-45-1 contains guidance for assets recorded under capital leases and the accumulated amortization to be identified in the lessee’s balance sheet or in the notes. Paragraph 840-30-50-2 only contains a reference to paragraph 840-30-50-3 for this disclosure guidance. It is proposed to amend paragraph 840-30-50-2, with a link to transition paragraph 105-10- 65-XB.
Comment Due Date: December 26, 2019 (Exposure Draft)/January 03, 2020 (Taxonomy Improvements)
Keywords: Americas, US, Banking, Securities, Accounting, Credit Losses, Derivatives and Hedging, Codification Improvements, Financial Instruments, Leases, Fair Value Measurement, Topic 326, Topic 815, Topic 842, Taxonomy, Reporting, FASB
A well-recognized researcher in the field; offers many years of experience in the real estate ﬁnance industry, and leads research efforts in expanding credit risk analytics to commercial real estate.
Leading economist; recognized authority and commentator on personal finance and credit, U.S. housing, economic trends and policy implications; innovator in econometric and credit modeling techniques.
Previous ArticleMAS and BDF Agree to Strengthen Financial Cooperation
The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.
The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.
The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.