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
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