As part of its ongoing financial instruments projects, the Financial Accounting Standards Board (FASB) has proposed an Accounting Standards Update (ASU) which requires additional disclosures by reporting entities regarding information about liquidity and interest rate risks arising from the entity’s use of financial instruments.
The incremental disclosures affect all entities regardless of size or complexity of operations, but the specific requirements vary depending on the nature of the entity and its operations.
The proposed ASU, Financial Instruments (Topic 825), Disclosures about Liquidity Risk and Interest Rate Risk (pdf), is a result of the FASB’s outreach project regarding the classification and measurement of financial instruments and concerns by financial statement users regarding additional decision-useful information related to an entity’s broad exposure to liquidity and interest rate risks associated with financial instruments. In issuing the proposed ASU, the FASB concluded that certain information relevant to financial statement users could not be achieved through classification and measurement, thus, additional disclosures were better designed to provide such information.
Learn more in our latest issue of the MHM Messenger:
- MHM Messenger 13-12a: How would non-financial institutions be affected?
- MHM Messenger 13-12b: How would financial institutions be affected?