Financial instruments: FASB standard on recognition and measurement
Updated April 2018
Our white paper, Financial instruments: FASB standard on recognition and measurement, provides an in-depth analysis of Accounting Standards Update (ASU) 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, as clarified by ASU 2018-03, Technical Corrections and Improvements to Financial Instruments —Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 began coming into effect on January 1, 2018 for calendar year public business entities and provides for early adoption.
Our white paper analyzes the changes made by ASU 2016-01, as clarified by ASU 2018-03, to existing guidance in the following areas:
- Measurement of equity securities
- Valuation allowance for deferred tax assets associated with available-for-sale debt securities
- Recognition of changes in fair value of liabilities attributable to instrument-specific credit risk
- Financial instrument disclosure requirements
In addition, our white paper outlines the effective date and transition provisions and discusses how to plan ahead for implementation. It concludes with a discussion on convergence and a chart that provides a comparison of current U.S. generally accepted accounting principles to ASU 2016-01 (as clarified by ASU 2018-03) and International Financial Reporting Standards 9, Financial Instruments.