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Area of Improvement |
Summary of Amendments |
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Issue 1: Fair Value Option Disclosures
Stakeholders questioned whether entities other than public business entities are required to provide the fair value option disclosures in paragraphs 825-10-50-24 through 50-32.
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The amendments clarify that all entities are required to provide the fair value option disclosures in paragraphs 825-10-50-24 through 50-32.
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Issue 2: Applicability of Portfolio Exception in Topic 820 to Nonfinancial Items
Stakeholders noted that certain paragraphs of Section 820-10-35, Fair Value Measurement—Overall— Subsequent Measurement, were not updated to reflect that nonfinancial items can apply the portfolio exception.
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Paragraphs 820-10-35-2A(g) and 820-10-35-18L are amended to include the phrase nonfinancial items accounted for as derivatives under Topic 815 to be consistent with the previous amendments to Section 820-10-35 that were made by Accounting Standards Update No. 2018-09, Codification Improvements.
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Issue 3: Disclosures for Depository and Lending Institutions
Stakeholders noted that the disclosure guidance for debt securities under Topic 942, Financial Services—Depository and Lending, did not completely align with the guidance in Topic 320, Investments—Debt and Equity Securities, particularly the guidance in paragraphs 942-320-50-3 and 320-10-50-3.
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The amendments clarify that the disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions.
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Issue 4: Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance in Subtopic 470-50
Stakeholders requested that paragraphs 470-50-40-17 through 40-18, which describe the accounting for fees between debtor and creditor and third-party costs directly related to exchanges or modifications of debt instruments, reference paragraph 470-50-40-21 for line-of-credit or revolving-debt arrangements.
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The amendments improve the understandability of the guidance.
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Issue 5: Cross-Reference to Net Asset Value Practical Expedient in Subtopic 820-10
Stakeholders suggested that a cross-reference be added to paragraph 820-10-50-2 to explain that those disclosure requirements do not apply to entities using the net asset value per share (or its equivalent) practical expedient described in paragraph 820-10-35-54B.
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The amendments improve the understandability of the guidance.
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Issue 6: Interaction of Topic 842 and Topic 326
Stakeholders requested clarification on determining the contractual term of a net investment in a lease for the purposes of measuring expected credit losses. Specifically, stakeholders noted that the contractual term of the net investment in a lease determined in accordance with Topic 842, Leases, may not align with the contractual term determined in accordance with Topic 326, Financial Instruments—Credit Losses.
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The amendments clarify that the contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit losses under Topic 326.
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Issue 7: Interaction of Topic 326 and Subtopic 860-20
Stakeholders noted that paragraph 860-20-25-13, which relates to a transferor regaining control of certain financial assets after a transfer that was previously accounted for as a sale is inconsistent with the requirements in Topic 326. Specifically, stakeholders noted that paragraph 860-20-25-13 precludes an entity from recognizing a loan loss allowance for loans that do not meet the definition of a security when they are rerecognized.
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The amendments to Subtopic 860-20, Transfers and Servicing—Sales of Financial Assets, clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.
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Area of Improvement |
Related Paragraphs |
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Issue 1: Fair Value Option Disclosures
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3–5
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Issue 2: Applicability of Portfolio Exception in Topic 820 to Nonfinancial Items
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6 and 7
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Issue 3: Disclosures for Depository and Lending Institutions
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8–10
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Issue 4: Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance in Subtopic 470-50
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11 and 12
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Issue 5: Cross-Reference to Net Asset Value Practical Expedient in Subtopic 820-10
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13 and 14
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Issue 6: Interaction of Topic 842 and Topic 326
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15–20
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Issue 7: Interaction of Topic 326 and Subtopic 86020
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21 and 22
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Paragraph |
Action |
Accounting Standards Update |
Date |
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326-10-65-4
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Amended
|
2020-03
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03/09/2020
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Paragraph |
Action |
Accounting Standards Update |
Date |
---|---|---|---|
Lease
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Added
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2020-03
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03/09/2020
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Lease Term
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Added
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2020-03
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03/09/2020
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Lessee
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Added
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2020-03
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03/09/2020
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Lessor
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Added
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2020-03
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03/09/2020
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Underlying Asset
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Added
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2020-03
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03/09/2020
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326-20-30-6A
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Added
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2020-03
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03/09/2020
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326-20-55-8
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Amended
|
2020-03
|
03/09/2020
|
Paragraph |
Action |
Accounting Standards Update |
Date |
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470-50-40-17
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Amended
|
2020-03
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03/09/2020
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470-50-40-18
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Amended
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2020-03
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03/09/2020
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470-50-40-21
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Amended
|
2020-03
|
03/09/2020
|
Paragraph |
Action |
Accounting Standards Update |
Date |
---|---|---|---|
820-10-35-2A
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Amended
|
2020-03
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03/09/2020
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820-10-35-18L
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Amended
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2020-03
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03/09/2020
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820-10-50-2
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Amended
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2020-03
|
03/09/2020
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Paragraph |
Action |
Accounting Standards Update |
Date |
---|---|---|---|
825-10-50-23A
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Added
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2020-03
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03/09/2020
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825-10-65-5
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Amended
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2020-03
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03/09/2020
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825-10-65-7
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Added
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2020-03
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03/09/2020
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Paragraph |
Action |
Accounting Standards Update |
Date |
---|---|---|---|
860-20-25-13
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Amended
|
2020-03
|
03/09/2020
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Paragraph |
Action |
Accounting Standards Update |
Date |
---|---|---|---|
942-320-50-1
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Amended
|
2020-03
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03/09/2020
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942-320-50-3
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Amended
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2020-03
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03/09/2020
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942-320-50-3A
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Amended
|
2020-03
|
03/09/2020
|
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