Highlights of the FASB’s July 17 Meeting

The Board made tentative decisions about reference rate reform, specifically facilitation of the effects of the transition away from interbank offered rates to alternative reference rates. Specific topics discussed included (1) hedge accounting relief related to the effects of reference rate reform and (2) the transition method, disclosures, relief period, comment period, and cost-benefit analysis related to future proposed guidance on this subject. The Board directed its staff to begin drafting a proposed ASU for a vote by written ballot.

The Board tentatively decided to amend how the effective dates of major standards are staggered for certain entities, including private companies, not-for-profit organizations, and small public companies. Specifically, the FASB decided to give such entities implementation relief by delaying the effective dates of its standards on credit losses, derivatives and hedging, leases, and insurance for two years after the effective dates for SEC filers (excluding smaller reporting companies, as defined by the SEC). The Board directed its staff to begin drafting two proposed ASUs that incorporate its decisions on the effective dates: one for the credit losses, derivatives and hedging, and leasing standards and one for the insurance standard.

The Board discussed the accounting for impairment of operating lease receivables and affirmed the FASB staff’s view that two methods of accounting for the impairment of operating lease receivables are acceptable.

The Board discussed an implementation issue under ASC 606, Revenue From Contracts With Customers, with respect to the combination of tuition and housing contracts provided by colleges and universities.