Effective Date Reminder for Accounting Standards Updates for the Financial Institutions Industry

By Baker Newman Noyes December 3, 2017

The Financial Accounting Standards Board has been extremely busy in the past several years issuing new accounting standards, some of which will have a broad impact. Following is a partial listing of Accounting Standards Updates (ASUs) in the implementation stages that are of interest to the financial institutions industry.

ASU #	Name	Public Business Entity Effective for:	Nonpublic Business Entity Effective for:	Summary
Topic 606 – Numerous ASUs starting with 2014-09	Revenue from Contracts with Customers	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Annual periods, beginning after 12/15/2018 and interim periods beginning after 12/15 2019	Primarily changes revenue recognition principles. Currently revenue is recognized when it is earned and realizable. In plain English revenue will now be recognized by measuring progress toward satisfying identified performance obligations.
2016-01	Recognition and Measurement of Financial Assets and Financial Liabilities	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Annual periods beginning after 12/15/2018, and for interim periods in annual periods beginning after 12/15/2019	Revised guidance related to certain matters involving the recognition, measurement, and disclosure of financial assets and financial liabilities. Requires equity securities with readily determinable fair values to be measured at fair value with changes in fair value to be recognized through net income.
2016-02	Leases	Annual periods, including interim periods within those annual periods, beginning after 12/15/2018	Annual periods beginning after 12/15/2019, and for interim periods in annual periods beginning after 12/15/2020	Requires most leases to be recorded on the balance sheet.
2016-05	Derivatives and Hedging – Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships	Annual periods, including interim periods within those annual periods, beginning after 12/15/2016	Annual periods beginning after 12/15/2017, and for interim periods in annual periods beginning after 12/15/2018	Clarifies that a change in one of the parties to a derivative instrument that is part of a hedge accounting relationship does not, on its own, require a dedesignation of that hedge accounting relationship if all other hedge accounting criteria continue to be met.
2016-09	Compensation – Stock Compensation-  Improvements to Employee Share-Based Payment Accounting	Annual periods, including interim periods within those annual periods, beginning after 12/15/2016	Annual periods beginning after 12/15/2017, and for interim periods in annual periods beginning after 12/15/2018	Various changes, mostly around requiring all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement
2016-13	Financial Instruments – Measurement of Credit Losses on Financial Instruments	Annual periods, including interim periods within those annual periods, beginning after 12/15/2019 for SEC filers; annual periods, including interim periods within those annual periods, beginning after 12/15/2020 for all other public business entities	Annual periods beginning after 12/15/2020, and for interim periods in annual periods beginning after 12/15/2021	Replaces existing “incurred loss” model for recognizing credit losses with a “current expected credit loss” model (CECL).
2016-15	Statement of Cash Flows -Classification of Certain Cash Receipts and Cash Payments	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Annual periods beginning after 12/15/2018, and for interim periods in annual periods beginning after 12/15/2019	Clarifies how certain cash receipts and cash payments, including but not limited to debt prepayment or extinguishments, and insurance settlements should be classified in the statement of cash flows.
2016-18	Statement of Cash Flows – Restricted Cash	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Annual periods beginning after 12/15/2018, and for interim periods in annual periods beginning after 12/15/2019	Amounts of restricted cash and cash equivalents should be included with cash and cash equivalents in the statement of cash flows.
2017-01	Business Combinations – Clarifying the Definition of a Business	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Annual periods beginning after 12/15/2018, and for interim periods within annual periods beginning after 12/15/2019	Clarifies guidance regarding whether an integrated set of assets and activities acquired is deemed the acquisition of a business (and, thus, accounted for as a business combination) or the acquisition of assets.
2017-04	Intangibles – Goodwill and Other – Simplifying the Test for Goodwill Impairment	SEC Filers – Annual or interim goodwill impairment tests in fiscal years beginning after 12/15/2019 Non SEC Filers – After 12/15/2020	Annual or interim goodwill impairment tests in fiscal years beginning after 12/15/2021	Eliminates step 2 from the goodwill impairment test, which requires comparing the implied fair value of goodwill with its carrying amount.
2017-07	Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Annual periods beginning after 12/15/2018, and for interim periods in annual periods beginning after 12/15/2019	Changes the income statement classification and presentation of service costs and other components of net benefit costs.
2017-08	Premium Amortization on Purchased Callable Debt Securities	Annual periods, including interim periods within those annual periods, beginning after 12/15/2018	Annual periods beginning after 12/15/2019, and for interim periods in annual periods beginning after 12/15/2020	Shortens the amortization period on the premium of certain individual callable debt securities to the earliest call date.
2017-09	Stock Compensation – Scope of Modification Accounting	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Annual periods, including interim periods within those annual periods, beginning after 12/15/2017	Requires modification accounting to be applied to all changes in terms and conditions of share-based payment awards, unless immediately after the modification, certain items remain unchanged.
2017-11	Earnings Per Share	Annual periods, including interim periods within those annual periods, beginning after 12/15/2018	Annual periods beginning after 12/15/2019, and for interim periods in annual periods beginning after 12/15/2020	Simplifies the accounting for certain equity-linked financial instruments (or embedded features) with “Down-Round” features.
2017-12	Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities	Annual periods, including interim periods within those annual periods, beginning after 12/15/2018	Annual periods beginning after 12/15/2019, and for interim periods in annual periods beginning after 12/15/2020	Better aligns an entity’s risk management activities and financial reporting for hedging relationships.

The above is not intended to be a complete list of ASUs in the implementation stage. Contact your BNN advisor at 1.800.244.7444 for more information on any of these topics.