FASB to Issue Instruments Classification Rule in January

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Steve Burkholder

Dec. 21 — New U.S. accounting rules on classifying and measuring financial instruments will be issued during the first week of January, the Financial Accounting Standards Board said.

The classification and measurement rules are to be effective for public companies in January 2018, the same time that 2014 rules on revenue reporting will be applied by companies for the first time, the board said Dec. 21.

The new classification and measurement rules, which present little change to existing generally accepted accounting principles, are expected to be followed in FASB's publication schedule by a mid- to late-February release of a far-reaching leasing standard, according to the board's plans.

The set of rules on leases will prescribe major changes to the balance sheets of many companies, including airlines and other transportation companies that lease large equipment for use in daily operations.

After the leases standard, FASB hopes to issue an important new standard on impairment of financial assets. That rule would include guidance on accounting for expected loan losses and reserves against them, a key issue for banks.

The U.S. accounting board hopes the new rules on impairment of financial instruments will be rolled out by the end of the first quarter of 2016, but the release might not actually take place until early in the second quarter.

To contact the reporter on this story: Steve Burkholder in Norwalk, Conn., at sburkholder@bna.com

To contact the editor responsible for this story: Ali Sartipzadeh at asartipzadeh@bna.com