Final standards
Fair value measurement of equity securities subject to contractual sale restrictions.
On June 30, 2022, the FASB issued issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions,” to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This ASU also clarifies that an entity cannot recognize and measure a contractual sale restriction as a separate unit of account. The ASU includes various disclosure requirements for equity securities subject to contractual sale restrictions. Entities will be required to disclose the nature and remaining duration of the restriction, the circumstances that could cause a lapse in the restriction, and the fair value of the equity securities subject to contractual sale restrictions reflected in the balance sheet.
Effective dates
For public business entities, the amendments are effective for fiscal years beginning after Dec. 15, 2023, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after Dec. 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. For all entities except investment companies as defined under Topic 946, “Financial Services – Investment Companies,” the amendments should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption.
Proposals
Deferral of reference rate reform sunset date and amendments to definition of SOFR swap rate
On April 20, 2022, the FASB issued a proposed ASU, “Reference Rate Reform (Topic 848) and Derivatives and Hedging (Topic 815): Deferral of the Sunset Date of Topic 848 and Amendments to the Definition of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate,” that defers the sunset date of relief provisions within Topic 848 from Dec. 31, 2022, to Dec. 31, 2024. In addition, the definition of the SOFR overnight index swap rate will be updated within the Master Glossary so that it is no longer limited to the overnight index swap rate based on SOFR but would include other rates based on SOFR, such as the term-based version of the SOFR rate.
The proposed ASU would be effective upon issuance of a final update.
Comments were due June 6, 2022.