Financial Instruments Accounting Standards Update Explained

Author: Pat Patterson

ASU 2016-01 and 2016-13
Learn about the new professional standard of Financial Instruments from the FASB. This Accounting Standard Update, Financial Instruments—Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities, (ASU 2016-01) represents significant changes in authoritative professional standards concerning financial instruments (financial assets and financial liabilities), their measurements, impairments, and disclosures. Also included will be a presentation of the CECL model for losses and/or impairments as presented in Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (ASU 2016-13). These subjects are explained and discussed.

Join Pat Patterson, CPA, for this one-hour CPE update on this critical standards and the implementation steps you need to be putting into place.

Publication Date: February 2018

Designed For
All CPAs in public practice and in industry who deal with the reporting of financial instruments, financial assets, and financial liabilities.

Topics Covered

• The impact of financial instruments, which includes financial assets and financial liabilities leases, will be discussed
• These issues are regarding the reporting of financial assets and financial liabilities
• An explanation of the "Current Expected Credit Loss", CECL model
• The measurement of financial assets and financial liabilities
• Issues involving effective dates and the impairment reporting on financial instruments
• Transition to the new standard and effective dates will be dealt with
• Any other related matters or recently issued matters will be examined

Learning Objectives

• Recognize recently issued new FASB Financial Instruments standard, ASU 2016-01 and ASU 2016-13
• Identify the ASU 2016-01 standard and its application will impact practically every professional accountant that deals with accounting issues and financial assets and financial liabilities
• Describe the Current Expected Credit Loss model in ASU 2016-13.
• Identify effective dates, reporting requirements, disclosure requirements, and related matters
• Recognize the amendments to Accounting Standards Update (ASU) No. 2016-01 require public entities
• Describe the main objective of the amendments to Accounting Standards Update (ASU) No. 2016-13
• Differentiate similarities between the current expected credit loss (CECL) model and International Financial Reporting Standards (IFRS) 9
• Identify the method an entity uses for measuring expected credit losses under the amendments to Update No. 2016-13
• Recognize how to mitigate the number of financial instruments that are categorized under Update No.2016-01
• Describe the way amendments to update no 2016-13 align with current U.S. GAAP with respect to credit losses on available-for-sale debt securities
• Differentiate financial instruments
• Identify reasons the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) could not agree on a credit impairment model

Level
Update

Instructional Method
Self-Study

NASBA Field of Study
Accounting (1 hour)

Program Prerequisites
Basic understanding of accounting for financial instruments.

Advance Preparation
None