FASB Proposes Improvements to the Financial Instruments Standard
FASB proposed an Accounting Standards Update to clarify and improve areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement. Comment period on the proposal ends on December 19, 2018. The proposed update is part of the ongoing agenda of FASB that is focused on improving the FASB Accounting Standards Codification® and correcting its unintended application.
The amendments in this proposed update relate to Topics 321, 326, and 815; they represent changes to clarify, correct errors in, or improve, the Codification. The proposed amendments would make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. The update summarizes the proposed amendments, alongside the description of the area of improvement. The amendments would apply to all reporting entities within the scope of the affected accounting guidance. This update specifies the following transitional arrangements:
- Amendments to Topic 326 and the related codification improvements to Update 2016-13. For entities that have not yet adopted the amendments in Update 2016-13 as of the issuance date of a final Update, the effective dates and transition requirements for the proposed amendments related to Update 2016-13 would be the same as the effective dates and transition requirements in Update 2016-13. For entities that have adopted the amendments in Update 2016-13 as of the issuance date of a final Update of these proposed amendments, FASB will determine the effective date and transition requirements for those proposed amendments after it considers stakeholder feedback on this proposed Update.
- Amendments to Topic 815 and the related codification Improvements to Update 2017-12 and other hedging items. For entities that have not yet adopted the amendments in Update 2017-12 as of the issuance date of a final Update of these proposed amendments, the effective dates and transition requirements for the proposed amendments to Topic 815 would be the same as the effective dates and transition requirements in Update 2017-12. For entities that have adopted the amendments in Update 2017-12 as of the issuance date of a final Update of these proposed amendments, the effective date would be as of the earlier of the beginning of the first quarterly period (if applicable) or first annual period after the issuance date of the final Update. For those entities, early adoption would be permitted, including adoption on any date on or after the issuance of a final Update.
- Amendments to Topic 321 and the related codification improvements to Update 2016-01. For entities that have not yet adopted the amendments in Update 2016-01 as of the issuance date of a final Update of these proposed amendments, the effective dates and transition requirements for the proposed amendments related to Update 2016-01 would be the same as the effective dates and transition requirements in Update 2016-01. For entities that have adopted the amendments in Update 2016-01 as of the issuance date of a final Update of these proposed amendments, FASB will determine the effective date and transition requirements for these proposed amendments after it considers stakeholder feedback on this proposed Update.
Related Links
Comment Due Date: December 19, 2018
Keywords: Americas, US, Accounting, Banking, Financial Instruments, Hedging, Credit Losses, IFRS 9, FASB
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
Ignazio Angeloni of ECB Speaks on Banking SupervisionRelated Articles
EBA Proposes Guidelines for Establishing Intermediate Parent Entities
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.