FASB issued an Accounting Standards Update that makes narrow-scope improvements to various aspects of the financial instruments guidance, including the current expected credit losses (CECL) standard. This update is part of the ongoing codification improvement project that is aimed at clarifying specific areas of accounting guidance to help avoid unintended application. The items addressed in this project are generally not expected to have a significant effect on current accounting practice or create a significant administrative cost for most entities.
The update, among other changes, clarifies the following:
- All nonpublic companies and organizations are required to provide certain fair value option disclosures.
- Disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions.
- Contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit losses under Topic 326.
- When an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.
Keywords: Americas, US, Accounting, Banking, CECL, IFRS 9, Disclosure, Topic 320, Topic 326, Topic 842, Credit Losses Standard, Financial Instruments, FASB
Previous ArticleESMA Publishes Supervisory Work Program for 2020
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.