Final Guidance FASB Issues Amendments to the Three New Standards on Financial Instruments

Published on May 20, 2019

The FASB amended its standards on credit losses, hedging, and recognizing and measuring financial instruments to clarify them and address implementation issues.

The amendments clarify the scope of the credit losses standard and address issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things.

With respect to hedge accounting, the amendments address partial-term fair value hedges, fair value hedge basis adjustments, application by not-for-profit entities and private companies, and certain transition requirements, among other things.

On recognizing and measuring financial instruments, they address the scope of the guidance, the requirement for re-measurement under ASC 820 when using the measurement alternative, certain disclosure requirements and which equity securities have to be remeasured at historical exchange rates.

The amendments to the credit losses and hedging standards have the same effective dates as those standards, unless an entity has already adopted the standards. The amendments to the recognition and measurement guidance are effective for fiscal years beginning after 15 December 2019. Early adoption is permitted.
(Source: EY Accounting Link - To The Point - Apri 26, 2019)