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The FASB Financial Instruments Project

The FASB has been working since 2009 on a project regarding the accounting for financial instruments. Despite the name, these projects are really about bank accounting and represent the biggest overhaul of accounting principles ever.

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The Financial Accounting Standards Board (FASB) has been working since 2009 on a project regarding the accounting for financial instruments. While dubbed "financial instruments" projects, these projects are really about bank accounting and represent the biggest overhaul of accounting principles ever.

In summary, there are three main issues:

  • Impairment: For those assets measured at amortized cost, how should the allowance for losses be measured?
  • Classification and measurement: What assets and liabilities should be measured at amortized cost (with an allowance for losses) and what should be measured at fair value?
  • Hedge accounting: For derivatives that are used in hedges, what requirements and accounting entries should there be?

Within each of these phases, footnote disclosure, as well as financial statement presentation issues, is addressed.

Impairment: See FASB Final CECL Standard issued June 2016

See Classifications and Measurements
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