FASB Holds May 27 Meeting

At its May 27, 2026, meeting, the FASB continued deliberating its project on the accounting for commodities. The Board also decided to add to its technical agenda projects on (1) the measurement of mortgage servicing rights and (2) subjective acceleration clauses.

The Board decided that entities within the scope of ASC 942 would have the option of electing, as an accounting policy, a fair value measurement alternative related to tangible commodity inventories. In addition, the Board decided to require entities to provide certain disclosures for tangible commodities for which such an election has been made.

The Board added to its agenda a project (based on an EITF Issue) addressing whether the measurement of a mortgage servicing right should include “the value attributable to recapture.” In addition to affirming a number of the decisions made by the EITF, the Board decided that a modified prospective transition approach would be used to apply the amendments and that early adoption would be permitted.

On the basis of recommendations from the Private Company Council, the Board added to its agenda a project on subjective acceleration clauses with respect to “determining the classification of debt in a classified balance sheet.” Other tentative decisions made by the Board on this topic include the following:

• Debt classification will be affected by a subjective acceleration clause only when the clause is triggered.
• The amendments will include an example illustrating the application of the subsequent-events guidance in situations in which a subjective acceleration clause is triggered.
• Certain conforming changes will be made to the guidance on (1) an entity’s “intent and ability to refinance on a long-term basis” and (2) revolving credit arrangements.
• All entities will be required to provide event-of-default disclosures similar to those currently required by the SEC for public business entities.

The FASB staff has been directed to draft proposed Accounting Standards Updates on all three topics for votes by written ballot. For more information, see the meeting handout and tentative Board decisions on the FASB’s Web site.