FASB Issues Proposed ASU on Transition for Sold Contracts

The FASB has issued a proposed Accounting Standards Update (ASU), Transition for Sold Contracts. The proposal would amend the transition guidance in ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts, “to allow an insurance entity to make an accounting policy election to exclude contracts that meet certain criteria from applying the amendments in [ASU] 2018-12 when they have been derecognized because of a sale or disposal of individual or a group of contracts or legal entities before [ASU 2018-12’s] effective date.”

Comments on the proposed ASU are due by August 8, 2022. For more information, see the press release on the FASB’s Web site.