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
- 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
Related content
- KPMG’s Defining Issues: FASB adds to Concepts Statement with guidance on materiality and disclosures
- KPMG’s Defining Issues: FASB amends defined benefit plan disclosures