FASB Discusses Improvements to Guidance on Financial Instruments

January 30, 2020

At its January 29, 2020, meeting, the FASB affirmed its decision to make Codification improvements to its guidance on financial instruments by issuing amendments related to the following seven topics:

Fair value option disclosures.
Applicability of portfolio exception to nonfinancial items.
Disclosures for depository and lending institutions.
Cross-reference to guidance on line-of-credit or revolving debt arrangements.
Cross-reference to net asset value practical expedient.
Interaction of ASC 842, Leases, and ASC 326, Financial Instruments — Credit Losses.
Interaction of ASC 326 and ASC 860-20, Transfers and Servicing — Sales of Financial Assets.

However, the Board decided that these amendments will be released separately from its November 2019 proposed ASU Codification Improvements. In addition, the Board affirmed its decisions related to effective date and transition and determined that the benefits of the amendments outweigh their costs.

The Board directed its staff to begin drafting a final ASU for a vote by written ballot.