ASU 2016-01 codifies improvements to recognition and measurement guidance
Summary
In January 2016 the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, to make targeted improvements to U.S. GAAP on accounting for financial instruments. This bulletin summarizes the guidance in ASU 2016-01.
The guidance in ASU 2016-01 makes targeted improvements to how entities
- Account for equity investments
- Present and disclose financial instruments
- Measure the valuation allowance on deferred tax assets related to available-for-sale debt securities
The guidance in ASU 2016-01 is effective for "public business entities," as defined, for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities, including not-for-profit entities and employee benefit plans within the scope of ASC 960 through 965 on plan accounting, the guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within fiscal years beginning after December 15, 2019.
Early application of the guidance in ASU 2016-01 is not permitted, with certain exceptions that are discussed in Section F.
To read this article in full, please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
