Defining Issues 
  |   August 2018
 

The FASB amends fair value disclosure requirements

Filed under: Presentation, Broad Transactions, Fair Value
 
KPMG reports on the FASB’s amended fair value disclosures in ASU 2018-13. These changes aim to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures.

Applicability

ASU 2018-13

  • All entities that are required to make disclosures about fair value measurements
  • Nonpublic entities continue to be exempt from some of the disclosure requirements

Relevant dates

Mandatory effective dates and early adoption provisions:

Effective date:

Public business entities

All other entities

Annual periods – Fiscal years beginning after

December 15, 2019

December 15, 2019

Interim periods – In fiscal years beginning after

December 15, 2019

December 15, 2019

Early adoption allowed?

Yes, for any period for which financial statements have not yet been issued (made available for issuance)

An entity may early adopt any eliminated or modified disclosure requirement and delay adoption of the additional disclosure requirements until their effective date.

Yes, for any period for which financial statements have not yet been issued (made available for issuance)

An entity may early adopt any eliminated or modified disclosure requirement and delay adoption of the additional disclosure requirements until their effective date.

Key impacts

The ASU introduced the following key changes.

Added (not required for nonpublic entities):

  • Disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements for instruments held at the end of the reporting period
  • Disclose the range and weighted average used to develop significant inputs for Level 3 fair value measurements.

Modified:

  • Nonpublic entities must report transfers into and out of Level 3 of the fair value hierarchy as well as purchases and issues of Level 3 assets and liability instead of the requirement to provide a reconciliation of opening and closing balances
  • For investments in certain entities that calculate net asset value, the requirement to disclose the entity’s estimate of the period of time over which the underlying assets might be liquidated is replaced by the disclosure of that time period if the investee has announced the timing publicly

In addition to the above the ASU amends and removes certain other disclosure requirements.

Report contents

  • Key facts and impacts
  • Testing the disclosure framework
  • Eliminated disclosures
  • Amended and clarified disclosures
  • New disclosure requirements

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