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FASB Clarifies Guidance for Derivative Instrument Accounting

Accounting Standards Update (ASU) No. 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, has been issued by the Financial Accounting Standards Board (“FASB”). The amendments clarify the guidance in Topic 815. Specifically, ASU No. 2016-05 clarifies that a change in the counterparty to a derivative instrument designated as the hedging instrument does not require dedesignation of the hedging relationship so long as all other hedge accounting criteria. The amendments in ASU No. 2016-05 are effective for public companies’ financial statements issued for fiscal years, and interim periods within those years, starting after December. Read More.

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FASB Declines Request for More Relief from Hedge Accounting Requirements

The Financial Accounting Standards Board (“FASB”) has turned down the Private Company Council’s (“PCC”) request for additional exemptions from its upcoming hedge accounting proposal. Decided on December 21st, the FASB said the PCC’s request for more relief from the proposal’s documentation requirements to justify their qualifications for specialized hedge accounting had little merit. The standard setter has already decided to simplify some of the documentation requirements. The FASB plans to publish its hedge accounting proposal in the first quarter of 2016.

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