An Accounting Standards Update issued by the Financial Accounting Standards Board on Dec. 17 focuses on updating the FASB Accounting Standards Codification for a variety of topics, including technical corrections, unintended application of the Codification, clarifications, and other minor improvements.
The ASU is issued as part of the board’s standing technical agenda project to address suggestions received from stakeholders on the FASB Accounting Standards Codification and to make other incremental improvements to Generally Accepted Accounting Principles. The resulting amendments are collectively referred to as Codification improvements.
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Accounting Standards January 22, 2025
FASB Proposes Codification Improvements
The amendments in the ASU, which addresses 33 issues, affect a wide variety of topics in the Codification and apply to all reporting entities within the scope of the affected accounting guidance, the FASB said.
The 33 areas of improvement include:
1. Remove the Master Glossary Term Amortized Cost
2. Clarify Comparative Financial Statement Presentation Requirements
3. Correct Error in Comprehensive Income Example
4. Clarify the Calculation of Earnings per Share When a Loss from Continuing Operations Exists
5. Clarify Disclosure Requirements for Lease Receivables Arising from Sales-Type Leases or Direct Financing Leases
6. Clarify Calculation of the Reference Amount for Beneficial Interests
7. Link to Master Glossary Term Class of Financing Receivable
8. Remove Previously Superseded Paragraph Related to Leases Guidance
9. Update References to Capitalization Guidance for Environmental Remediation Costs
10. Clarify Methods to Account for Treasury Stock Retirements
11. Correct Error in Repurchase Agreement Illustrative Example
12. Align Intraperiod Tax Allocation Guidance
13. Remove Reference to Pooling-of-Interests Method
14. Update References for Investments in Equity Securities Guidance
15. Update References for NFP Presentation Guidance
16. Add Reference to Other-Than-Temporary Impairment (OTTI) for Equity Method Investments
17. Update Illustrative Statement of Cash Flows for an Entity That Is in Reorganization
18. Update Fresh-Start Illustrative Example
19. Remove Reference to Cost Method Investments
20. Clarify Guidance for the Transfer of Receivables from Contracts with Customers
21. Correct Sentence Fragment in Transfers and Servicing Implementation Guidance
22. Remove OTTI Guidance
23. Clarify the Applicability of NFP Consolidation Guidance
24. Remove the Phrase Recognized and Unrecognized from NFP and Health Care Entities Income Statement Guidance
25. Clarify Accounting for Certain Receivables by Not-for-Profit Entities
26. Clarify Impairment Guidance for Institutions of Higher Education
27. Remove Reference to Equity Securities in the NFP Other Investment Guidance
28. Remove Reference to a Probability Assessment in Evaluating Whether to Recognize Part of a Transaction as a Contribution
29. Update NFP Business Combinations Guidance to Reference Exceptions to the Recognition Principle
30. Clarify Relevant Guidance for an NFP That Is an Acquirer
31. Add Cross-Reference to Hedge Documentation and Hedge Effectiveness Guidance for Certain NFPs
32. Update Defined Contribution Plan Illustrative Example
33. Update Real Estate Guidance to Refer to the Use of the Proportional Amortization Method
The amendments in the ASU are effective for all entities for annual reporting periods beginning after Dec. 15, 2026, and interim reporting periods within those annual reporting periods.
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