This Financial Reporting Update highlights key developments and issues that are relevant to Finance and Accounting Professionals.
Financial Accounting Standards Board
On November 12, 2025, the Financial Accounting Standards Board (FASB) published ASU No. 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans, aiming to improve guidance on accounting for purchased loans. The ASU addresses stakeholder concerns about the accounting for acquired financial assets, specifically that prior guidance related to the distinction between purchased credit-deteriorated (PDC) and non-PCD assets created unnecessary complexity and reduced comparability. The amendments in this update expand the population of acquired financial assets subject to the gross-up approach in Topic 326 and are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments to this update should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance.
On November 25, 2025, the Financial Accounting Standards Board (FASB) published ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, with intent to clarify and improve its guidance on hedge accounting. This new standard will clarify certain aspects of the guidance on hedge accounting and address several incremental hedge accounting issues arising from the global reference rate reform initiative. The published ASU allows entities to hedge accounting to a greater number of economic hedges in five areas: (1) Similar Risk Assessment for Cash Flow Hedges, (2) Hedging Forecasted Interest Payments on Choose-Your-Rate Debt Instruments, (3) Cash Flow Hedges of Nonfinancial Forecasted Transactions, (4) Net Written Options as Hedging Instruments, and (5) Foreign-Currency-Denominated Debt Instruments as Hedging Instrument and Hedged Item (Dual Hedge). The amendments in this update apply to any entity that elects to apply hedge accounting in accordance with Topic 815. For public business entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2026. For entities other than public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted on any date on or after the issuance of this update.
On December 4, 2025, the Financial Accounting Standards Board (FASB) published ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This ASU defines government grants and clarifies their scope, establishes recognition criteria, and includes disclosure requirements regarding the nature of government grants, accounting policies applied, and significant terms and conditions. Prior to this ASU, there had been an absence on specific guidance on the recognition, measurement, and presentation of a government grant received by business entities. Business entities had resulted in using International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance, however they would not apply all aspects of this guidance. This led to questions about the acceptability of certain accounting approaches and resulted in diversity in practice. The new ASU is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods for public business entities. For other entities, the ASU is in effect for annual reporting periods beginning after December 15, 2029. Early adoption is permitted.
On December 8, 2025, the Financial Accounting Standards Board (FASB) published ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which aims to improve the clarity and navigability of required interim reporting disclosures. The objective of this ASU is to clarify that Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP and to list the required interim disclosures. The ASU also incorporates a disclosure principle that requires entities to disclose events and changes occurring after the end of the most recent fiscal year that have a material impact on the entity. The new ASU does not change the fundamental nature of interim reporting. For public business entities, the amendments in the ASU are effective for interim reporting periods within annual reporting periods beginning after Dec. 15, 2027. For other entities, they are effective for interim reporting periods within annual reporting periods beginning after Dec. 15, 2028. Early adoption is permitted for all entities, and the ASU can be applied either prospectively or retrospectively to any or all prior periods.
Securities and Exchange Commission
There were no notable updates to report.
Public Company Accounting Oversight Board
There were no notable updates to report.
American Institute of Certified Public Accountants
There were no notable updates to report.