Heads Up

This issue discusses the FASB’s newly issued Accounting Standards Update (ASU) No. 2022-02, Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect loan refinancings and restructurings for borrowers experiencing financial difficulty.

This issue expands on our March 21, 2022, executive summary by providing details and considerations related to specific disclosures that would be required under the SEC’s proposed rule "The Enhancement and Standardization of Climate-Related Disclosures for Investors." Under the proposed rule, such disclosures would include metrics that reflect the impact of climate-related events, transition activities, and expenditures; financial statement estimates and assumptions; greenhouse gas emission data; governance plans; and climate-related risks, among other information.

This issue discusses the FASB’s newly issued Accounting Standards Update (ASU) No. 2022-01, Fair Value Hedging — Portfolio Layer Method. The ASU clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets. ASU 2022-01 amends the guidance in ASU 2017-12 that, among other things, established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible. ASU 2022-01 renames that method the “portfolio layer” method.

This issue discusses the SEC’s proposed rule The Enhancement and Standardization of Climate-Related Disclosures for Investors. Under the proposed rule, a registrant would be required to provide disclosures about greenhouse gas emissions (with attestation for Scope 1 and Scope 2 disclosures), certain financial statement disclosures, and qualitative and governance disclosures within its registration statements and annual reports (e.g., Form 10-K). Comments on the proposed rule are due 30 days after its publication in the Federal Register or May 20, 2022, whichever is later.

This issue discusses the SEC’s recently issued proposed rule "Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure," which would require registrants to provide enhanced disclosures about “cybersecurity incidents and cybersecurity risk management, strategy, and governance.” The proposal addresses concerns related to the pervasive use of digital technologies, shift to hybrid work environments, rise in the use of cryptoassets, and increase in illicit profits from ransomware and stolen data, which continue to escalate cybersecurity risk and its related cost to registrants and investors.

This issue discusses the FASB’s newly issued proposed Accounting Standards Update (ASU) aimed at enhancing transparency about an entity’s use of supplier finance programs. Although the SEC staff and credit rating agencies have called for enhanced disclosures about such programs, the FASB Accounting Standards Codification does not currently include any disclosure requirements that apply specifically to them. Under the proposal, an entity would be required to disclose information about a supplier finance program that is sufficient to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. Comments on the proposed ASU are due by March 21, 2022.