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by Ken Tysiac | Oct 19, 2020
FASB issued rules amendments Thursday to clarify an entity’s accounting responsibilities related to callable debt securities.
Accounting Standards Update (ASU) No. 2020-08, Codification Improvements to Subtopic 310-20, Receivables — Nonrefundable Fees and Other Costs, states that an entity should reevaluate whether a callable debt security is within the scope of Paragraph 310-20-35-33 for each reporting period.
The standard is not expected to have a significant effect on current practice or create a large administrative cost for most entities. The amendments in the standard are intended to make FASB’s Accounting Standards Codification easier to understand and apply.
For public business entities, the amendments take effect for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2020. Early application is not permitted.
For all other entities, the amendments are effective for fiscal years beginning after Dec. 15, 2021, and interim periods within fiscal years beginning after Dec. 15, 2022. Early application is permitted for all other entities for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2020.
All entities are required to apply the amendments on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities.
Full Article
Source: Journal Of Accountacy
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