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Business and Policy Areas
Business and Policy Areas

New FASB Standard Eliminates Some Fair Value Disclosures

January 8, 2016

After two exposure drafts and several years of deliberations, the Financial Accounting Standards Board (FASB) on January 5 issued Accounting Standards Update (ASU) No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Though the ASU is broad in scope, it is not expected to have a significant impact on not-for-profit (NFP) entities.

One upside: NFPs will no longer be required to provide fair value disclosures for financial instruments that are measured at cost or amortized cost (sometimes referred to as FAS 107 disclosures). For example, an institution that carries its debt at amortized cost would no longer be required to provide disclosure about the fair value of that debt. Prior to this ASU, only NFPs with less than $100 million of assets and with no derivatives such as interest rate swaps were exempt from having to provide those disclosures.

The standard is effective for all NFPs for fiscal years beginning after December 15, 2017 (FY18 for most institutions). However, certain provisions of the guidance—including the elimination of the fair value disclosures described above—may be adopted immediately. The ASU, along with a high-level FASB in Focus overview, is available on FASB’s website.


Sue Menditto
Director, Accounting Policy