PSC Comments on FASB's Proposed ASU-Derivatives and Hedging (Topic 815)
The PSC sent comments on proposed updates to hedge accounting guidance under Topic 815. The amendments expand eligible hedging strategies, better align accounting standards with risk management activities and improve the operability of hedge accounting.
The TXCPA Professional Standards Committee provided feedback on the proposed Accounting Standards Update (ASU), Derivatives and Hedging (Topic 815). The PSC is supportive of the proposed amendments to allow interest rate risk to be the hedged risk for HTM debt securities, any tenor of SOFR to be considered a benchmark interest rate and Float-to-Float Cross-Currency Swaps with different reset dates to be hedging instruments in net investment hedges.
The PSC also praised the FASB’s efforts to ensure standards better reflect the economics of an entity’s risk management activities in its financial statements and enhance the operability of hedge accounting. The PSC does not foresee any implementation challenges.
Read the Exposure Draft here. View TXCPA PSC comment letter here.
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