FASB Proposes Improvements to Hedge Accounting
November 12, 2019
The FASB has issued a proposed Accounting Standards Update (ASU), Codification Improvements to Hedge Accounting.
The proposed ASU would clarify certain aspects of the Board’s new hedging standard, ASU 2017-12, including (1) changes in hedged risk in a cash flow hedge, (2) contractually specified components in cash flow hedges of nonfinancial forecasted transactions, (3) foreign-currency-denominated debt instruments designated as hedging instruments and hedged items, and (4) using the term “prepayable” under the shortcut method. According to FASB Chairman Russ Golden, the purpose of the proposed ASU is to “promote . . . better, more consistent application” of the hedging standard by better aligning certain aspects of the standard with its “stated objectives.”
Comments on the proposed ASU are due by January 13, 2020. For more information, see the press release and FASB in Focus newsletter on the FASB’s Web site.
On November 13, 2019, the FASB issued for comment Proposed Taxonomy Improvements for Proposed Accounting Standards Update, Derivatives and Hedging (Topic 815): Codification Improvements to Hedge Accounting. Comments on the proposed taxonomy improvements are due by January 13, 2020.