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
US Agencies Propose to Extend Form FFIEC 102 for Three YearsRelated Articles
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023
