New AICPA Technical Questions and Answers Issued
December 8, 2017
The American Institute of Certified Public Accountants (“AICPA”) recently issued a new Technical Question and Answer (“TQA”) and amendments for TQA Section 2220, Long-Term Investments.
The new TQA, Section 2220.28, Definition of Readily Determinable Fair Value and Its Interaction With the NAV Practical Expedient, features amendments to TQA section 2220.18, “Applicability of Practical Expedient.” It eliminates TQA section 2220.24, “Disclosures—Ability to Redeem Versus Actual Redemption Request” and TQA section 2220.25, “Impact of ‘Near Term’ on Categorization Within Fair Value Hierarchy.” Section 2220.28 also offers guidance in understanding and applying the Financial Accounting Standards Board (“FASB”) FASB Master Glossary definition “readily determinable fair value.”
TQA Sections 2220.18–.28 were established to help companies implement FASB Accounting Standards Codification (“ASC”) 820, Fair Value Measurements. The sections concern investments that must be assessed and disclosed at fair value and fall under the scope of paragraphs 4–5 of FASB ASC 820-10-15.