FASB Issues Narrow-Scope Improvements to Financial Instruments

The FASB issues an Accounting Standards Update (ASU) that makes narrow-scope improvements to financial instruments guidance. This includes the current expected credit losses (CECL) standard issued in 2016.

The ASU is part of the FASB’s ongoing Codification improvement project to clarify specific areas of accounting guidance. It’s purpose is also to help avoid unintended application. The items addressed in that project generally are not expected to have a significant effect on current accounting practice. The items addressed are also not expected to create a significant administrative cost for most entities.

“The FASB decided to issue this financial instruments ASU separate from other Codification improvements to increase stakeholder awareness of the changes and to expedite the improvement process,” stated FASB Chairman Russell G. Golden.  “It addresses areas brought to our attention by stakeholders, and it represents our ongoing commitment to support a successful transition to our standards.”

There are several narrow-scope improvements to financial instruments guidance. The ASU clarifies that all nonpublic companies and organizations are to provide certain fair value option disclosures.

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CCH ARM Editorial

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