FASB voted to proceed with a new accounting standard that is expected to improve and simplify accounting rules related to hedge accounting. The final Accounting Standards Update (ASU) is expected to be published in August 2017.
Under the new standard, hedge accounting would be refined and expanded for both financial (for example, interest rate) and commodity risks. The economic results would be presented in a more transparent way, both on the face of the financial statements and in the footnotes, for investors and analysts. The new standard will take effect for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, for public companies and for fiscal years beginning after December 15, 2019 (and interim periods for fiscal years beginning after December 15, 2020), for private companies. Early adoption will be permitted in any interim period or fiscal years before the effective date of the standard.
In September 2016, the FASB had issued an Exposure Draft that generated 60 comment letters. Additionally, the FASB engaged in extensive stakeholder outreach, including numerous discussions with investors and other financial statement users; two public roundtables, which included preparers, auditors, regulators, and other stakeholders; and meetings with the Private Company Council to discuss private company hedge documentation issues.
Keywords: FASB, Banking, Americas, USA, Accounting, Hedge Accounting, ASU
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