FASB updates Financial Instrument standards
The Financial Accounting Standards Board has released an accounting standards update, clarifying aspects of recently issued standards relating to financial instruments. The three standards, relating to credit losses, hedging, and recognition and measurement of financial instruments were issued separately but were intended to converge with IFRS9.
The FASB standards differed from IFRS9 particularly in regard to accounting for credit losses. These latest changes, which respond to questions raised by stakeholders, will lead to further divergence from IFRS9 in areas such as accrued interest, transfers between classifications or categories for loans and debt securities, and recoveries of financial assets and trade receivables that were previously written off.
FASB chairman, Russell Golden, said “Since issuing the financial instruments standards, including credit losses and derivatives and hedging, the FASB staff has been working with stakeholders to obtain feedback and address questions on the guidance. Through these interactions, the FASB identified areas of the guidance that require clarification and correction. The amendments in the ASU address those areas.”
This article was posted on Baker Tilly International Global Office website, and posted with their approval.
