Industries

Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

FASB expands fair value hedge accounting

Defining Issues | March 2022

Amendments to establish the portfolio-layer method for hedges of financial assets in a closed portfolio.

ASU 2022-01 establishes the portfolio-layer method, which expands an entity’s ability to achieve fair value hedge accounting for hedges of financial assets in a closed portfolio.

Applicability

ASU 2022-01, Fair Value Hedging – Portfolio Layer Method

  • Entities that elect to apply the portfolio-layer method of hedge accounting in ASC 815.

Relevant dates

  • March 28, 2022 – FASB issued final ASU
 Public business entititesOther entities
Annual periods – Fiscal years beginning afterDecember 15, 2022December 15, 2023
Interim periods – In year of adoptionYesYes
Early adoption permitted?Yes. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted ASU 2017-12.

Key Impacts:

The ASU includes the following key provisions:

  • Allows non-prepayable financial assets to be included in the closed portfolio.
  • Expands the current single-layer model to allow multiple hedged layers of a single closed portfolio.
  • Clarifies that fair value basis adjustments in an existing portfolio layer method hedge are maintained at the closed portfolio level (i.e. not allocated to individual assets).
  • Prohibits an entity from considering fair value basis adjustments related to a portfolio-layer method hedge when estimating credit losses.
  • Addresses how an entity accounts for fair value basis adjustments upon a discontinuation of a portfolio-layer method hedge.
  • Allows the reclassification of held-to-maturity debt securities to available-for-sale within 30 days of the date of adoption, if certain criteria are met.

Transition requirements:

  • Adjustments to the fair value basis adjustments are applied on a modified retrospective basis by recording a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption.
  • An entity applies the guidance for designating more than one portfolio-layer method hedging relationship for a single closed portfolio on a prospective basis.

Download the document:

FASB issues ASU

Download PDF

Explore more

Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline