FASB Issues Update on Meeting of Advisory Council in September 2019
FASB published a summary of the quarterly meeting of the Financial Accounting Standards Advisory Council. The members of the Advisory Council discussed the recent proposed update on facilitation of the effects of reference rate reform on financial reporting (Topic 848). The members provided feedback on three main areas: readiness and transition progress, proposed accounting relief, and potential qualitative and quantitative disclosures.
Overall, the members of the Advisory Council were very supportive of the proposed accounting relief. In terms of readiness, many companies are early in their transition process and have not begun to consider the potential impact and risks that reference rate reform may have on their financial results. The Council members from some industries, such as financial services, and larger companies generally were further along in their assessments and education about the transition when compared to other companies. Some smaller companies anticipated that they would be unaffected, given the rate structures in their contracts. The members of the Advisory Council acknowledged the temporary nature of the relief and supported the commitment of FASB to monitor and consider any future adjustments needed to the sunset provision related to the proposed relief.
Members of the Advisory Council generally disagreed that FASB should add new disclosures related to the reference rate reform. Preparers and practitioners showed concerns about the operationality and costs that could be involved and raised questions about what information could be provided. Some investors and other users indicated that additional disclosures could provide useful information in certain industries or companies where the impact was significant. Yet other investors and certain users indicated that the current Management Discussion and Analysis (MD&A) disclosures related to risks and uncertainties could provide sufficient information about risks related to the transition and additional disclosures may be unnecessary.
Related Links
Keywords: Americas, US, Accounting, Banking, Securities, Reference Rate Reform, Reporting, Disclosures, Interest Rate Benchmarks, Topic 848, FASB
Featured Experts
Scott Dietz
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.
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Previous Article
IAIS Publishes Application Paper on Recovery PlanningRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.