Yesterday, the FASB met to discuss its project on narrow-scope improvements to accounting for interest income associated with the purchase of callable debt securities. The Board (1) affirmed its previous tentative decision to require amortization of premiums on all callable debt securities to the first call date, excluding those subject to ASC 325-40,1 and (2) authorized its staff to draft a proposed Accounting Standards Update (ASU) to address the amortization of premiums on callable debt securities. The proposed ASU will provide for a modified retrospective approach to transition; the comment period will be 45 days.
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