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
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
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
BCBS Reviews Impact of Stronger Capital and Liquidity RequirementsRelated Articles
APRA Issues Interim Update to Policy Priorities for 2021 and Beyond
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
EC Adopts Solvency II and Resolution Rules Package for Insurers
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
OCC Issues Booklets on Regulatory Reporting and Earnings
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
ECB Sets Out Results of Economy-Wide Climate Stress Tests
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
EBA Examines Implications of Increasing Use of Digital Platforms in EU
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
OCC Identifies Operational Risk Deficiencies in MUFG Union Bank
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
