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FASB one step closer to finalizing its classification and measurement project

  • FASB meeting Image

Jan 15, 2015

At its January 14, 2015, meeting, the FASB discussed its project on classification and measurement of financial instruments.

After redeliberating its prior decisions on the cost and complexity of its proposed ASU on recognizing and measuring financial assets and financial liabilities, the Board directed the staff to draft a final ASU for vote by written ballot. Decisions that the FASB made at the meeting included the following:

  • Disclosures about core deposit liabilities — In a reversal of its previous decision, the FASB voted to remove these proposed disclosure requirements.
  • Transition — The FASB voted to reaffirm its tentative decision to require entities to apply a modified retrospective transition approach under which a cumulative-effect adjustment would be made to the statement of financial position as of the beginning of the first reporting period in which the guidance becomes effective.
  • Disclosures about hybrid financial instruments — The FASB voted to issue a new exposure draft (ED) on the proposed disclosure requirements for a 45-day comment period. Under the ED, an entity would be required to disclose the carrying amount and measurement attribute, as well as the financial statement line item in which bifurcated embedded derivatives and related host contracts are presented.

The FASB will discuss the effective date of the final standard at a future meeting. For more information, see the meeting minutes on the FASB’s Web site. 

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