KPMG addresses frequently asked questions on ASC 321 and changes to ASC 825. This latest edition includes updated interpretations on investments in qualified affordable housing projects.
ASC 321, ASC 825, (ASU 2016-01, ASU 2018-03, ASU 2019-04, ASU 2020-01)
Effective date, ASU 2020-01 | Public entities | All other entities |
---|---|---|
Annual periods – Fiscal years beginning after |
Dec 15, 2020 |
Dec 15, 2021 |
Interim periods – In fiscal years beginning after |
Dec 15, 2020 |
Dec 15, 2021 |
What began as an ambitious project to overhaul the classification and measurement requirements for financial instruments evolved into a narrower scope project. While the accounting changes were ultimately limited to specific areas, that doesn’t overshadow the significant changes within those areas.
Perhaps the biggest change is the measurement alternative for equity securities without a readily determinable fair value, which introduced a new concept into US GAAP – cost adjusted to fair value when there are observable transactions – with greater volatility in earnings. To date, the measurement alternative has been the biggest source of interpretive questions, which is reflected in the number of Q&As that we have dedicated to it. It has also been the area where changes to processes and controls have been the most significant relative to other changes in the standard.
Our purpose in this updated publication is to explain the changes from legacy US GAAP and help you gain an in-depth understanding of these requirements by answering the questions that we are encountering in practice.
Key impacts of ASU 2016-01
Key impacts of ASU 2020-01
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