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 2021-06—Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants (SEC Update)

ASC 942

n/a

Upon issuance (August 2021)

This ASU amends certain SEC paragraphs from the Codification in response to the issuance of SEC Final Rule Nos. 33-10786, Amendments to Financial Disclosures About Acquired and Disposed Businesses, and 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.

Update 2021-01 - Reference Rate Reform

ASC 848

As of

3/12/20 - 12/31/22

The amendments in this ASU clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

Update 2020-10 - Codification Improvements

Various

Beginning After

12/15/2020

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 2020-09 - Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762

ASC 470

Beginning After

1/4/2021

This ASU amends and supersedes various SEC paragraphs pursuant to the issuance of SEC Release No. 33-10762.

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

ASC 310

Beginning After

12/15/2020

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 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

ASC 848

As of

3/12/20 - 12/31/22

This ASU provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. It does not apply to contract modifications made, and hedging relationships entered into or evaluated, after Dec. 31, 2022, except for hedging relationships existing as of Dec. 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.

Update 2020-02 - Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update)

ASC 326
ASC 842

Beginning After

12/15/2020

This ASU amends guidance based on SEC Staff Accounting Bulletin Number 119 and provides guidance related to measuring credit losses.

Update 2020-01 - Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (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

12/15/2020

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

12/15/2020

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

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 2021-03 - Intangibles—Goodwill and Other (Topic 350): Accounting Alternative for Evaluating Triggering Events

ASC 350

Beginning After

12/15/19 (on a prospective basis)

The amendments in this Update provide private companies and not-for-profit entities with an accounting alternative to perform the goodwill impairment triggering event evaluation as required in Subtopic 350-20 as of the end of the reporting period, whether the reporting period is an interim or annual period.
Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance as of March 30, 2021

Update 2021-01 - Reference Rate Reform

ASC 848

As of

3/12/20 - 12/31/22

The amendments in this ASU clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

Update 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

ASC 848

As of

3/12/20 - 12/31/22

This ASU provides an optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after Dec. 31, 2022, except for hedging relationships existing as of Dec. 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.

Update 2019-02 - Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials (a consensus of the Emerging Issues Task Force)

ASC 926-20
ASC 920-350

Beginning After

12/15/2020

The amendments in this update align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. Review the ASU for more information.

Update 2018-18 - Clarifying the Interaction between Topic 808 and Topic 606

ASC 808

Beginning After

12/15/2020

This ASU provides guidance clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer (as determined under Topic 606).
See Topic 808 for additional information, and ASC 808-10-65-2 regarding transition.

Update 2018-17 - Targeted Improvements to Related Party Guidance for Variable Interest Entities

ASC 810

Beginning After

12/15/2020

Entities Under Common Control: Effectively expands the private company alternative allowing private company reporting entities to elect not to apply the VIE guidance to qualifying common control leasing arrangements to all common control arrangements that meet specific criteria. The alternative cannot be applied selectively to common control arrangements that meet the criteria for applying this accounting alternative.

Decision Maker Fees: Indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

The amendments in this must be applied retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the earliest period presented.

Update 2018-16 - Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes

ASC 815

Beginning After

12/15/2019 (If adopted ASU 2017-12) / 12/15/2020 (If not adopted ASU 2017-12)

The Overnight Index Swap (OIS) Rate based on the Secured Overnight Financing Rate (SOFR) is included as an eligible benchmark interest rate under Topic 815 for hedge accounting purposes. The amendments in this update should be on a prospective basis for qualifying new or redesignated hedging relationships entered into on or after the date of adoption.

Update 2018-15 - Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

ASC 350-40

Beginning After

12/15/2020

This update aligns certain costs with the treatment described in ASU 2015-05 (Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement) to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license.

Update 2018-14 - Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans

ASC 715-20

Ending After

12/15/2021

The amendments in this Update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Some disclosure requirements have been removed and some disclosure requirements have been added to Subtopic 715-20.

The amendments in this Update also clarify the disclosure requirements in paragraph 715-20-50-3, which state that certain information for defined benefit pension plans should be disclosed.

Update 2017-12 - Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities

ASC 815

Beginning After

12/15/2020

This ASU reduces complexity with respect to hedge documentation and hedge effectiveness assessments. The amendments in this ASU eliminate the requirement to separately measure and report hedge ineffectiveness; expands the types of permissible cash flow hedging strategies (i.e. certain contractually specified components); and adds the Securities Industry and Financial Markets Association ("SIFMA") municipal swap rate as a permitted U.S. benchmark interest rate.