FASB to Consult on Clarification of Interactions on Topics 321 and 323
FASB, on June 13, 2019, ratified the consensus-for-exposure on Issue No. 19-A, “Financial Instruments—Clarifying the Interactions between Topic 321 and Topic 323,” at a meeting of the Emerging Issues Task Force. At the meeting, FASB directed the staff to draft a proposal reflecting the consensus-for-exposure for vote by written ballot. FASB has decided to issue a proposal reflecting these changes for public comment for 30 days. The next Emerging Issues Task Force meeting has been tentatively scheduled for September 19, 2019.
The Task Force reached a consensus-for-exposure that an entity should:
- Consider observable transactions that would require the investor to either apply or discontinue the equity method of accounting for applying the measurement alternative under Topic 321 (Investments—Equity Securities), immediately before applying or on discontinuing the equity method under Topic 323 (Investments—Equity Method and Joint Ventures).
- Not consider whether the equity security underlying the forward contract or purchased option would, individually or with existing investments, be accounted for under the equity method on settlement of the forward contract or exercise of the purchased option for purposes of evaluating the characteristic in paragraph 815-10-15-141(a).
- Apply the proposed amendments in the Update resulting from this Issue No. 19-A prospectively. The Task Force also reached a consensus-for-exposure not to require any recurring disclosures related to equity method investments or equity securities that are accounted for under the measurement alternative.
- Disclose, in the period of adoption, the nature of and reasons for the change in accounting principle, the transition method, and a qualitative description of the financial statement line items affected by the change.
Related Links
Keywords: Americas, US, Banking, Accounting, Securities, Consensus-for-Exposure, Financial Instruments, Emerging Issues Task Force, FASB
Previous Article
IMF Reports Examine Stability of Financial System in SwitzerlandRelated Articles
BIS Innovation Hub Sets Out Work Program for 2021
BIS Innovation Hub published the work program for 2021, with focus on suptech and regtech, next-generation financial market infrastructure, central bank digital currencies, open finance, green finance, and cyber security.
EC Plans to Consult on Crisis Management and EDIS Framework Revisions
In an article published by SRB, Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, discussed the progress and next steps toward completion of the Banking Union.
EBA Finalizes Remuneration Standards for Investment Firms in EU
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA Issues Update on Move to New Data Collection Platform
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.