FASB Releases ASU 2019-05, Topic 326, Financial Instruments-Credit Losses, Targeted Transition Relief

The Financial Accounting Standards Board has released ASU 2019-05, Topic 326, Financial Instruments-Credit Losses, Targeted Transition Relief.

In the summary the Board outlines the main provisions as follows:

The amendments in this Update provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses— Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. An entity that elects the fair value option should subsequently apply the guidance in Subtopics 820-10, Fair Value Measurement—Overall, and 825-10.