Certain of the fair value disclosures are not required for nonpublic entities. The fair value standard refers to the first definition of a “nonpublic entity” in the Master Glossary of the FASB Codification.

Definition from ASC Master Glossary

Nonpublic Entity: Any entity that does not meet any of the following conditions:
  1. Its debt or equity securities trade in a public market either on a stock exchange (domestic or foreign) or in an over-the-counter market, including securities quoted only locally or regionally.
  2. It is a conduit bond obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over the counter market, including local or regional markets).
  3. It files with a regulatory agency in preparation for the sale of any class of debt or equity securities in a public market.
  4. It is required to file or furnish financial statements with the Securities and Exchange Commission.
  5. It is controlled by an entity covered by criteria (a) through (d).

Under ASC 820-10-50-2F, the disclosures not required for nonpublic entities include:
  • The range and weighted average of significant unobservable inputs (ASC 820-10-50-2(bbb)(2)(i))
  • The changes in unrealized gains or losses in income and OCI for the period (ASC 820-10-50-2(d))
  • Information about the uncertainty of Level 3 fair value measurements to changes in unobservable inputs and interrelationships between those unobservable inputs (ASC 820-10-50-2(g))

Also, instead of a full rollforward of Level 3 instruments, ASC 820-10-50-2G requires nonpublic entities to disclose the following for each class of investments:
  • Purchases and issuances (each disclosed separately)
  • Transfers into or out of Level 3 and the reasons for those transfers

Like public companies, nonpublic entities must consistently follow their policy for determining when transfers are deemed to have occurred and disclose transfers into Level 3 separate from transfers out of Level 3.

20.7.1 Disclosures of instruments not measured at fair value

As noted in FSP 20.5, the disclosures for financial instruments that are not measured at fair value (in ASC 825-10-50) are not required for a reporting entity that is not a public business entity.
New guidance
In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. ASU 2019-04 clarifies the Board’s intent in not requiring entities that are not public business entities to disclose the fair value of held-to-maturity debt securities. This amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as the reporting entity has adopted all of the amendments in ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. See FSP 9.6.3 for further information.

20.7.2 Interim disclosures

Reporting entities that are not public business entities are not required to provide the disclosures regarding concentrations of credit risk described in ASC 825-10-50-20 through ASC 825-10-50-23 in interim periods.

20.7.3 Private company alternative — hedge accounting

Reporting entities that are not public business entities may elect a hedge accounting alternative (a simplified hedge accounting approach) for certain types of swaps to economically convert a variable-rate borrowing into a fixed-rate borrowing. See FSP 19.6.1 for further discussion.
The guidance allows a private company to measure the designated swap at settlement value rather than fair value. All of the presentation and disclosure requirements of ASC 815 and ASC 820 for public business entities apply; however, as the simplified approach allows for the swap to be recorded at settlement value, the settlement value may be used in place of fair value for disclosure purposes. Any amounts disclosed at settlement value should be clearly designated as such, and disclosed separate from amounts disclosed at fair value.
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