Earlier today, the Financial Accounting Standards Board issued the long-awaited update to its hedging standards. Accounting Standards Update (ASU) No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, is aimed at simplifying and improving existing guidance in U.S. generally accepted accounting principles (GAAP) established by the FASB.
Highlights from hedging standard
According to the FASB, the new guidance:
The new hedging standard generally becomes effective in 2019 for public companies (“public business entities”), and 2020 for private companies. Read more in FASB’s overview of the hedging standard, and in this FASB in Focus.See also FASB’s video on the new hedging standard.
SEC updates rev rec guidance
In other financial reporting-related news, the U.S. Securities and Exchange Commission recently released an update to its long-standing guidance on revenue recognition that had been articulated in SEC Staff Accounting Bulletin No. 101 (SAB 101).
According to the SEC, the update, issued as Staff Accounting Bulletin No. 116:
brings existing SEC staff guidance into conformity with the Financial Accounting Standard Board’s adoption of and amendments to ASC Topic 606. The SAB modifies SAB Topic 13, Revenue Recognition, SAB Topic 8, Retail Companies, and Section A, Operating-Differential Subsidies of SAB Topic 11, Miscellaneous Disclosure.
As to effective date, SAB 116 becomes effective “upon a registrant’s adoption of ASC Topic 606,” i.e. when a company adopts the FASB’s new rev rec standard. Prior to adopting FASB’s new rev rec standard, the SEC states that prior SEC staff guidance (prior to SAB 116) should be followed.
In addition to SAB 116, the SEC also issued two interpretive releases relating to particular rev rec matters, to conform to FASB’s new rev rec standard:
The MACPA has numerous educational programs this fall on FASB’s new rev rec standard – including Interpreting the New Revenue Recognition Standard: What All CPAs Need to Know (half-day webcast, choose Sept. 5, Oct. 27, Nov. 29 or Dec. 27, or half-day in-person Nov. 15); and Revenue Recognition: Mastering the New FASB Requirements (full day webcast, choose Sept. 5, Oct. 12, Nov. 28 or Dec. 26, or full-day in-person on Oct. 27)l.