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Highlights of the FASB’s August 29 meeting

  • FASB meeting Image

Aug 31, 2018

At its August 29, 2018, meeting, the FASB discussed its projects on (1) inclusion of the OIS rate based on the SOFR as a benchmark interest rate for hedge accounting purposes and (2) credit loss implementation.

Inclusion of the OIS rate based on the SOFR as a benchmark interest rate for hedge accounting purposes

The FASB continued redeliberating its February 2018 proposed ASU, Inclusion of the Overnight Index Swap (OIS) Rate Based on the Secured Overnight Financing Rate (SOFR) as a Benchmark Interest Rate for Hedge Accounting Purposes. The Board confirmed several decisions, established an effective date, and directed its staff to draft an ASU for a vote by written ballot. For more information, see the meeting minutes on the FASB’s Web site.

Financial instruments — credit losses implementation

The Board discussed the implementation issues raised at the June 2018 meeting of the Transition Resource Group for Credit Losses and made tentative decisions on the following topics:

  • Consideration of capitalized interest by using a method other than a discounted cash flow method under the current expected credit losses (CECL) model.
  • Refinancing and loan repayments.
  • Definition of “amortized cost basis.”
  • Reversal of accrued interest on nonperforming financial assets.
  • Transfer of loans from held for sale to held for investment and transfer of credit-impaired debt securities from available for sale to held to maturity.
  • Accounting for recoveries under the CECL model.

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

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.