FASB Publishes Proposed Accounting Standards Update
On June 27, 2012, the Financial Accounting Standards Board (FASB) issued for public comment a proposed Accounting Standards Update (ASU) intended to improve financial reporting about certain risks inherent in financial instruments and how they contribute to the reporting organization's broader risks. Stakeholders are asked to provide input by September 25, 2012.
- A financial institution to disclose the carrying amounts of classes of financial assets and financial liabilities in a table, segregated by their expected maturities, including off-balance-sheet financial commitments and obligations.
- A financial institution that is also a depository institution to disclose information about its time deposit liabilities, including the cost of funding in a table or list during the previous four fiscal quarters.
- An organization that is not a financial institution to disclose its expected cash flow obligations in a table, segregated by their expected maturities, without being required to include the reporting organization's financial assets in that table.
- All reporting organizations to provide their available liquid funds in a table, which includes unencumbered cash, high-quality liquid assets, and borrowing availability.
- All reporting organizations to provide additional quantitative or narrative disclosure of the organization's exposure to liquidity risk, including discussion about significant changes in the amounts and timing in the quantitative tables and how the reporting organization managed those changes during the current period.
- The carrying amounts of classes of financial assets and financial liabilities according to time intervals based on the contractual repricing of the financial instruments.
- An interest rate sensitivity table that presents the effects on net income and shareholders' equity of hypothetical, instantaneous shifts of interest rate curves.
- Quantitative or narrative disclosures of the organization's exposure to interest rate risk, including discussion about significant changes in the amounts and timing in the quantitative tables and how the reporting organization managed those changes during the current period.
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Derivatives and Hedging (Topic 815). As a result of the FASB's outreach and feedback from stakeholders, the Board decided to publish this proposed ASU separately from the classification and measurement aspects of the project on accounting for financial instruments. The FASB's redeliberations of the May 2010 proposed ASU are ongoing.