FASB Holds October 11 Meeting

October 13, 2023

At its October 11, 2023, meeting, the FASB discussed its projects on (1) improvements to the guidance on hedge accounting and (2) accounting for environmental credit programs.

Hedge Accounting

The Board made tentative decisions related to two issues addressed in its November 2019 proposed Accounting Standards Update (ASU) Codification Improvements to Hedge Accounting: (1) dual hedging relationships and (2) use of the term “prepayable” in applying the shortcut method. In addition, the Board addressed a third issue, net option written options on hedging instruments, that has arisen in connection with the cessation of LIBOR. The Board plans to discuss the remaining issues within the scope of the hedge accounting improvements project at a future meeting.

Accounting for Environmental Credit Programs

Recognition and measurement reassessment requirements related to environmental credits.

The Board discussed the staff’s research and outreach related to this project and made tentative decisions about the project’s scope as well as about the recognition and measurement of environmental credits. Specific topics the Board addressed included the following:

Which assets and liabilities are within the project’s scope.
Recognition, initial measurement, and subsequent measurement of assets related to environmental credits.
Application of the costing method and portfolio approach to environmental credits.
Derecognition of environmental credits.