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FASB issued a new standard designed to make hedge accounting easier for financial statement preparers and easier for financial statement users to understand.
The Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities was created to better align accounting rules with a company’s risk management activities; better reflect the economic results of hedging in the financial statements; and simplify hedge accounting treatment.
The standard takes effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2018. For private companies, the standard takes effect for fiscal years beginning after Dec. 15, 2019, and interim periods beginning after Dec. 15, 2020. Early adoption is permitted.
Check out the Journal of Accountancy story HERE.