Recent and upcoming Accounting Standards Updates (ASU)

ASU

Topic No.

Beginning / Ending

Date for Public Business Entities

Summary Description (As per the FASB Summary)

Update 2023-05 - Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement

ASC 805

On or After

1/1/2025

Requiring a joint venture to recognize and initially measure its assets and liabilities using a new basis of accounting upon formation reduces diversity in practice and provides decision-useful information to a joint venture’s investors. 

Update 2023-08 - Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets

ASC 350

Beginning After

12/15/2024

An entity is required to subsequently measure assets that meet certain criteria (i.e., certain digital intangible assets) at fair value with changes recognized in net income each reporting period. The amendments in this Update also include presentation and disclosure requirements.

Update 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures

ASC 740

Beginning After

12/15/2024

The amendments require public business entities to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items meeting a quantitative threshold (≥5% of pretax income multiplied by the statutory tax rate). Other entities must qualitatively disclose specific categories of reconciling items and jurisdictions causing significant differences between the statutory and effective tax rates.

ASU

Topic No.

Beginning / Ending

Date for Public Business Entities

Summary Description (As per the FASB Summary)

Update 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

ASC 280

Beginning After

12/15/2023

This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

Update 2023-02 - Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (A Consensus of the Emerging Issues Task Force)

ASC 323

Beginning After

12/15/2023

This ASU permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

Update 2022-03 - Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

ASC 820

Beginning After

12/15/2023

This ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The ASU also requires certain disclosures for equity securities subject to contractual sale restrictions.

ASU

Topic No.

Beginning / Ending

Date for Public Business Entities

Summary Description (As per the FASB Summary)

Update 2022-05 - Financial Services—Insurance (Topic 944): Transition for Sold Contracts

ASC 944

Beginning After

12/15/2022

This ASU amends the LDTI transition guidance to allow an insurance entity to make an accounting policy election on a transaction-bytransaction basis. An insurance entity may elect to exclude contracts that meet certain criteria from applying the amendments in Update 2018-12. To qualify for the accounting policy election, as of the LDTI effective date both of the following conditions must be met:
1. The insurance contracts must have been derecognized because of a sale or disposal of individual or a group of contracts or legal entities.
2. The entity has no significant continuing involvement with the derecognized contracts.

Update 2022-04 - Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations

ASC 405

Beginning After

12/15/2022

The amendments in this ASU require that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs.See ASU 2022-04 for more information.

Update 2022-02—Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures

ASC 326

Beginning After

12/15/2022

This ASU eliminates the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements. This ASU also requires that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost.

Update 2022-01—Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method

ASC 815

Beginning After

12/15/2022

"This ASU applies to all entities that elect to apply the portfolio layer method of hedge accounting in accordance with Topic 815.

Update 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

ASC 805

Beginning After

12/15/2022

This ASU states that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. An acquirer should account for the related revenue contracts with Topic 606 as if it had originated the contracts

Update 2018-12 - Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts

ASC 944

Beginning After

12/15/2022

This ASU affects aspects of the guidance in Topic 944 related to assumptions used to measure the liability for future policy benefits for traditional and limited-payment contracts; measurement of market risk benefits; amortization of deferred acquisition costs; and diclosures.

ASU

Topic No.

Beginning / Ending

Date for Public Business Entities

Summary Description (As per the FASB Summary)

Update 2021-10—Government Assistance (Topic 832)

ASC 832

Beginning After

12/15/2021

The amendments in this ASU require disclosures for transactions with a government that is accounted for by applying grant or contribution accounting models (i.e., IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, or Subtopic 958-605, Not-For-Profit Entities—Revenue Recognition).

Update 2021-05—Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments

ASC 842

Beginning After

12/15/2021

Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met:
1. The lease would have been classified as a sales-type lease or a direct financing lease in accordance with the classification criteria in paragraphs 842-10-25-2 through 25-3
2. The lessor would have otherwise recognized a day-one loss

Update 2021-04 - Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force)

ASC 470/ASC 260/ASC 718/ASC 815

Beginning After

12/15/2021

This ASU requires the issuer to treat a modification of an equity-classified written call option that does not cause the instrument to become liability-classified as an exchange of the original instrument for a new instrument.

Update 2020-07 - Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets

ASC 958

Beginning After

6/15/2021

This ASU applies to NFPs that receive contributed nonfinancial assets. Contribution revenue may be presented in the financial statements using different terms (for example, gifts, donations, grants, gifts-in-kind, donated services, or other terms). The amendments address presentation and disclosure of contributed nonfinancial assets.

Update 2020-06 - Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

ASC 470
ASC 815

Beginning After

12/15/2021

This ASU affects entities that issue convertible instruments and/or contracts in an entity’s own equity. For convertible instruments, the instruments primarily affected are those issued with beneficial conversion features or cash conversion features because the accounting models for those specific features are removed. However, all entities that issue convertible instruments are affected by the amendments to the disclosure requirements in this Update.

ASU

Topic No.

Beginning / Ending

Date for Public Business Entities

Summary Description (As per the FASB Summary)

ASU 2022-03 - Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

ASC 820

Beginning After

12/15/2024

This ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The ASU also requires certain disclosures for equity securities subject to contractual sale restrictions."

ASU 2023-02 - Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)

ASC 323

Beginning After

12/15/2024

This ASU permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

Update 2023-08 - Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets

ASC 350

Beginning After

12/15/2024

An entity is required to subsequently measure assets that meet certain criteria (i.e., certain digital intangible assets) at fair value with changes recognized in net income each reporting period. The amendments in this Update also include presentation and disclosure requirements.

ASU

Topic No.

Beginning / Ending

Date for Non-Public Business Entities

Summary Description (As per the FASB Summary)

Update 2023-01 - Leases (Topic 842): Common Control Arrangements

ASC 842

Beginning After

12/15/2023

This ASU provides a practical expedient for private companies and not-for-profit entities that are not conduit bond obligors to use the written terms and conditions of a common control arrangement to determine:
1. Whether a lease exists and, if so,
2. The classification of and accounting for that lease.
This ASU also requires that leasehold improvements associated with common control leases be:
1. Amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset (the leased asset) through a lease. However, if the lessor obtained the right to control the use of the underlying asset through a lease with another entity not within the same common control group, the amortization period may not exceed the amortization period of the common control group.
2. Accounted for as a transfer between entities under common control through an adjustment to equity (or net assets for not-for-profit entities) if, and when, the lessee no longer controls the use of the underlying asset.

Update 2022-01 - Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method

ASC 815

Beginning After

12/15/2023

This ASU allows nonprepayable financial assets also to be included in a closed portfolio hedged using the portfolio layer method. That expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable
financial assets, thereby allowing consistent accounting for similar hedges.

Update 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

ASC 805

Beginning After

12/15/2023

This ASU requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. An acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

Update 2020-06 - Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

ASC 470
ASC 815

Beginning After

12/15/2023

This ASU affects entities that issue convertible instruments and/or contracts in an entity’s own equity. For convertible instruments, the instruments primarily affected are those issued with beneficial conversion features or cash conversion features because the accounting models for those specific features are removed. However, all entities that issue convertible instruments are affected by the amendments to the disclosure requirements in this Update.

For contracts in an entity’s own equity, the contracts primarily affected are freestanding instruments and embedded features that are accounted for as derivatives under the current guidance because of failure to meet the settlement conditions of the derivatives scope exception related to certain requirements of the settlement assessment. The Board simplified the settlement assessment by removing the requirements (1) to consider whether the contract would be settled in registered shares, (2) to consider whether collateral is required to be posted, and (3) to assess shareholder rights. Those amendments also affect the assessment of whether an embedded conversion feature in a convertible instrument qualifies for the derivatives scope exception. Additionally, the amendments in this Update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments.

ASU

Topic No.

Beginning / Ending

Date for Non-Public Business Entities

Summary Description (As per the FASB Summary)

Update 2022-04 - Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations

ASC 405

Beginning After

12/15/2022

This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs.

Update 2022-02 - Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures

ASC 326

Beginning After

12/15/2022

For entities that have adopted the amendments in Update 2016-13, the amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not yet adopted the amendments in Update 2016-13, the effective dates for the amendments in this Update are the same as the effective dates in Update 2016-13. The amendments in this Update that are related to TDRs affect all entities after they have adopted Update 2016-13. The amendments related to vintage disclosures affect public business entities with investments in financing receivables that have adopted Update 2016-13.

Update 2020-03 - Codification Improvements to Financial Instruments

ASC 326
ASC 842
ASC 860

Beginning After

12/15/2022

This ASU clarifies 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 and that clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.

Update 2019-11 - Codification Improvements to Topic 326, Financial Instruments—Credit Losses

ASC 326

Beginning After

12/15/2022

Update 2019-05 - Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief

ASC 326

Beginning After

12/15/2022

This ASU provides entities having certain instruments within the scope of ASC 326-20 (Financial Instruments—Credit Losses—Measured at Amortized Cost) with an option to irrevocably elect the fair value option in ASC 825-10, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. An entity that elects the fair value option should subsequently apply the guidance in ASC 820-10 and ASC 825-10.

Update 2019-04 - Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments

ASC 326
ASC 815
ASC 825

Beginning After

12/15/2022

This ASU includes codification improvements.

Update 2018-19 - Codification Improvements to Topic 326, Financial Instruments—Credit Losses

ASC 326

Beginning After

12/15/2022

This ASU provides nonpublic business entities additional time to implement the new credit losses standard (ASU 2016-13).In addition, this update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20.

Update 2017-04 - Intangibles - Goodwill and Other

ASC 350

Beginning After

12/15/2022

This ASU eliminates Step 2 of the quantitative goodwill impairment test.

Update 2016-13 - Financial Instruments-Credit Losses

ASC 326

Beginning After

12/15/2022

This ASU Introduces an expected losses approach to estimating credit losses. It also significantly modifies the impairment model for AFS debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.

ASU

Topic No.

Beginning / Ending

Date for Non-Public Business Entities

Summary Description (As per the FASB Summary)

Update 2021-10—Government Assistance (Topic 832)

ASC 832

Beginning After

12/15/2021

The amendments in the ASU require disclosures for transactions with a government that is accounted for by applying grant or contribution accounting model (i.e., IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, or Subtopic 958-605, Not-For-Profit Entities—Revenue Recognition).

Update 2021-09—Leases (Topic 842): Discount Rate for Lessees That Are Not Public Business Entities

ASC 842

Beginning After

12/15/2021

This ASU provides a lessee that is not a public business entity more flexibility when making the accounting policy election to use an appropriate risk-free rate by allowing such election to be made by class of underlying asset. Prior to the amendments in this ASU, a lessee’s election to use a risk-free rate for lease classification and measurement was required to be applied to all leases.

Update 2021-07—Compensation—Stock Compensation (Topic 718): Determining the Current Price of an Underlying Share for Equity-Classified Share-Based Awards (a consensus of the Private Company Council)

ASC 718

Beginning After

12/15/2021

This ASU allows for a practical expedient for a nonpublic entity to determine the current price of equity-classified share-based awards by using the “reasonable application of a reasonable valuation method”.

Update 2021-05—Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments

ASC 842

Beginning After

12/15/2021

Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met:
1. The lease would have been classified as a sales-type lease or a direct financing lease in accordance with the classification criteria in paragraphs 842-10-25-2 through 25-3.
2. The lessor would have otherwise recognized a day-one loss.

Update 2021-04 - Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force)

ASC 470/ASC 260/ASC 718/ASC 815

Beginning After

12/15/2021

This ASU requires the issuer to treat a modification of an equity-classified written call option that does not cause the instrument to become liability-classified as an exchange of the original instrument for a new instrument.

Update 2020-10 - Codification Improvements

Various

Beginning After

12/15/2021

This ASU includes an amendment that improves consistency for all disclosure guidance and inclusion in the appropriate disclosure sections. It also amends and adds new headings, cross referencing to other guidance, and refining or correcting terminology.

Update 2020-08 - Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs

ASC 310

Beginning After

12/15/2021

This ASU clarifies that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period.

Update 2020-07 - Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets

ASC 958

Beginning After

6/15/2021

This ASU applies to NFPs that receive contributed nonfinancial assets. Contribution revenue may be presented in the financial statements using different terms (for example, gifts, donations, grants, gifts-in-kind, donated services, or other terms). The amendments address presentation and disclosure of contributed nonfinancial assets.

Update 2020-01 - Investments—Equity Securities (Topic 321), Investments—Equity Method and JointVentures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force)

ASC 321
ASC 323
ASC 815

Beginning After

12/15/2021

This ASU clarifies that entities that apply the measurement alternative in ASC 321 should consider observable transactions that result in entities initially applying or discontinuing the use of the equity method of accounting under ASC 323. The guidance also clarifies that, certain forward contracts and purchased options on equity securities are in the scope of ASC 321.

Update 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

ASC 740

Beginning After

12/15/2021

This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

Update 2019-01 - Leases (Topic 842): Codification Improvements

ASC 842

Beginning After

Issues 1 & 2: 12/15/2021 /Issue 3: Upon Adoption

This ASU addresses three issues:
Issue 1: Determining the Fair Value of the underlying Asset by Lessors That Are Not Manufacturers or Dealers
Issue 2: Presentation on the Statement of Cash Flows – Sales-Type and Direct Financing Leases
Issue 3: Transition Disclosures Related to Topic 250, Accounting Changes, and Error Corrections

Update 2018-20 - Leases: Narrow-Scope Improvements for Lessors

ASC 842

Beginning After

12/15/2021

Scope improvement for lessors involving:
- Sales taxes and other similar taxes collected from lessee
- Certain lessor costs
- Recognition of variable payments for contracts with lease and non-lease components
See ASU for complete list of changes.

Update 2018-11 - Leases (Topic 842): Targeted Improvements, Leases

ASC 842

Beginning After

12/15/2021

This ASU amends Topic 842 by (1) adding an additional transition method that allows reporting entities to transition to Topic 842 as of the beginning of the period in which it is adopted but does not change the requirement for all reporting entities to adopt on a modified retrospective basis; and (2) adding a practical expedient that, if elected, allows lessors to combine non-lease components that meet certain criteria with their associated lease components that qualify for operating lease classification.

Update 2018-10 - Codification Improvements to Topic 842, Leases

ASC 842

Beginning After

12/15/2021

This ASU amends Topic 842 by making certain corrections and clarifications that refine Topic 842 but do not change its meaning or intent.

Update 2018-01 - Land Easement Practical Expedient

ASC 842

Beginning After

12/15/2021

Upon adopting Topic 842, a reporting entity must apply Topic 842 prospectively to all new or modified land easements to determine whether it should be accounted for as a lease. However, there is also an optional transition practical expedient to not evaluate land easements under Topic 842 if certain criteria are met.

Land easements that meet the definition of a lease under Topic 842 will not qualify for the accounting treatment described in Example 10 of Subtopic 350-30(paragraphs 350-30-55-29 through 55-32).

Update 2016-02 - Leases

ASC 842

Beginning After

12/15/2021

This ASU changed the accounting for leases in several ways. The most significant change is most operating leases will be brought on to lessee balance sheets, requiring lessees to recognize liabilities reflecting the discounted amount of lease payments payable over the lease term. See our Lease Accounting Resource Center for more information.