Defining Issues | December 2019

Proposed FASB Codification improvements

The proposals are part of an ongoing FASB project to make non-substantive technical corrections, clarifications, and improvements that are not expected to have a significant effect on accounting practice or create a significant administrative cost to most entities.


Proposed ASU

  • All entities

Relevant dates

  • November 26, 2019 – FASB issued proposed ASU
  • December 26, 2019 – Comments due on proposed ASU

Key impacts

The FASB is proposing to clarify, correct errors in, and make improvement to several Codification Topics, including proposals to:

  • Remove references to various Concepts Statements within the Codification.
  • Improve consistency of the Codification by including all disclosure guidance in the appropriate Disclosure Sections.
  • Align the contractual term to measure expected credit losses for a net investment in a lease under the new credit losses standard (ASC 326) to be consistent with the lease term determined under the new leases standard (ASC 842).
  • Clarify the applicability of the portfolio exception to nonfinancial items accounted for as derivatives.
  • Clarify that nonpublic business entities are subject to the fair value option disclosures.
  • Clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326. 

Related content

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