The Financial Accounting Standards Board (FASB) is consulting on an Accounting Standards Update that would modify the disclosure requirements for interim financial reporting (Topic 270) by entities, including banks. The Update includes amendments with respect to the disclosures under Topic 326 (Financial Instruments: Credit Losses), Topic 815 (Derivatives and Hedging), Topic 825 (Financial Instruments), Topic 942 (relevant for Regulatory Capital Disclosures by credit unions, banks, and savings institutions), and Topic 948 (Mortgage Banking). The comment period on the proposed Update, which is part of the FASB project to improve the effectiveness of disclosures, ends on January 31, 2022.
The amendments to interim reporting (Topic 270) would apply to all entities that provide interim financial statements and notes in accordance with the Generally Accepted Accounting Principles (GAAP). The proposed Accounting Standards Update would incorporate a requirement that was previously included in the U.S. Securities and Exchange Commission (SEC) Regulation S-X that requires disclosure at interim periods when a significant event or transaction has occurred since the prior year-end that has a material effect on an entity. SEC removed language from Regulation S-X, Rule 10-01, Interim Financial Statements, with the 2018 issuance of SEC Release No. 33-10532, Disclosure Update and Simplification. The amendments in this proposed Accounting Standards Update would add a new principle, based on the removed portion of Regulation S-X, which would be applicable to all entities that provide interim financial statements and notes in accordance with GAAP. The proposed Accounting Standards Update also states that the resulting disclosures may be transaction- or event-specific. The proposed update also includes amendments to clarify when comparative disclosures are required.
Comment Due Date: January 31, 2022
Keywords: Americas, US, Banking, Reporting, Accounting Standards Update, Accounting, Disclosures, CECL, US GAAP, Financial Instruments, Topic 326, Topic 815, Topic 825, FASB
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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