United States

FASB issues ASU 2018-04


In November 2017, the SEC issued Staff Accounting Bulletin (SAB) No. 117 to bring its existing guidance into conformity with Topic 321 of the Financial Accounting Standards Board’s (FASB)  Accounting Standards Codification (ASC), “Investments —Equity Securities.” SAB 117 states that SAB Topic 5.M, “Other Than Temporary Impairment of Certain Investments in Equity Securities, no longer is applicable upon a registrant’s adoption of ASC 321. For public business entities, Topic 321 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. After a registrant adopts ASC 321, investments in equity securities that previously qualified for presenting changes in fair value within other comprehensive income will be measured at fair value with changes in fair value presented immediately in net income.

Recently, the FASB issued Accounting Standards Update (ASU) 2018-04, Investments — Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273, to delete ASC 320-10-S99-1, which had codified SAB Topic 5.M in the ASC. ASU 2018-04 also removes from the ASC special requirements in SEC Regulation S-X Rule 3A-05 for public utility holding companies. The changes were effective when issued.