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Highlights from the FASB’s March 23 meeting

  • FASB meeting Image

Mar 25, 2016

At its March 23, 2016, meeting, the FASB discussed (1) long-duration insurance contracts, (2) financial statements of not-for-profit entities (NFPs), (3) hedging, and (4) income tax disclosures.

Insurance — targeted improvements to the accounting for long-duration contracts

The FASB made tentative decisions on (1) transition methods for measuring the liability for future policy benefits and market risk benefits and (2) transition-related disclosures. In addition, the FASB directed its staff to begin drafting a proposed ASU for a vote by written ballot. For more in­for­ma­tion, see Deloitte's related journal entry as well as the meeting minutes on the FASB’s Web site.

Fi­nan­cial state­ments of not-for-profit en­ti­ties

The FASB ten­ta­tively de­cided to (1) keep the current requirement for NFPs under which expenses “must be reported by their functional classification either on the statement of activities or in the notes to the financial statements.” Further, NFPs would be required to “report all expenses (other than netted investment expenses) by function and nature in one location.” For more in­for­ma­tion, see Deloitte's related journal entry as well as the meeting minutes on the FASB’s Web site.

Financial instruments — hedging

The FASB made a number of tentative decisions related to transition. Specifically, entities would:

  • “[A]pply either a modified retrospective approach or a retrospective approach as of the adoption date to hedging relationships existing at that date.”
  • Be required, upon adoption, to provide certain disclosures in accordance with ASC 250.
  • Be allowed to make certain “one-time elections upon adoption.”
  • Need to take into account transition considerations related to (1) measurement methods for “hedged items in fair value hedges of interest rate risk,” (2) “hedges of a tax-exempt security where the hedged risk was the total price of the security before adoption,” and (3) “partial-term fair value hedges.”

The FASB has directed its staff to begin drafting a proposed ASU for a vote by written ballot. For more in­for­ma­tion, see Deloitte's related journal entry as well as the meeting minutes on the FASB’s Web site.

Dis­clo­sure frame­work: disclosure review — income taxes

The FASB continued to deliberate the income tax disclosure requirements, reaffirming and clarifying certain tentative decisions and reversing others. The Board decided that all of its income tax disclosure requirements would be applied prospectively. In addition, the FASB directed its staff to perform additional outreach related to investments associated with undistributed earnings. For more in­for­ma­tion, see Deloitte's related journal entry as well as the meeting minutes on the FASB’s Web site.

Correction list for hyphenation

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