FASB published the tentative decisions taken at its Board meetings in January 2020. FASB discussed a summary of comments on seven financial instrument amendments and decided to finalize these amendments separately from the November 2019 proposed Accounting Standards Update related to codification improvements. FASB directed the staff to draft a final Accounting Standards Update for vote by written ballot. The key decisions taken at the meeting are related to leases (Topic 842), measurement of credit losses on financial instruments (Topic 326), and last-of-layer method under hedging.
Interactions of Topics 842 and 326—FASB affirmed its decision on interaction of Topics 842 and 326. The amendments in the proposed Update 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.
Interaction of Topic 326 and Subtopic 860-20 on sale of financial assets—FASB affirmed its decision on interaction of Topic 326 and Subtopic 860-20. The amendments in the proposed Update would clarify that when an entity regains control of financial assets previously sold and an allowance for credit losses should be recorded in accordance with Topic 326.
Last-of-layer method under Hedging—FASB decided not to add or amend the last-of-layer disclosure requirements in Topic 815 on derivatives and hedging, related to the addition of the proposed multiple-hedge model.
- Tentative Decisions, January 29, 2020
- Tentative Decisions, January 22, 2020
- Meeting Handout, January 29, 2020 (PDF)
- Meeting Handout, January 22, 2020 (PDF)
Keywords: Americas, US, Banking, Securities, Accounting, Financial Instruments, Leases, Hedging, Credit Losses, Topic 326, Topic 842, Topic 815, Tentative Decisions, Accounting Standards Update, FASB
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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