Alert: FASB Accounting Standards Update 2020-08 – Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs

Category: US GAAP

Alert: FASB Accounting Standards Update 2020-08 – Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs

On October 15, 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2020-08 Codification Improvements to Subtopic 310-20, Receivables- Nonrefundable Fees and Other Costs (ASU 2020-08). ASU 2020-08 is part of the FASB’s ongoing project for improving the Codification or correcting its unintended application.

The amendments in ASU 2020-08 clarify that all reporting entities should re-evaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. The amendments are not expected to have a significant impact on current practice for most entities.

The amendments in ASU 2020-08 should be applied on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities, and are effective as follows:

  • For public business entities – for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption is not permitted.
  • For all other entities – for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. Early adoption is permitted for fiscal years and interim periods therein beginning after December 15, 2020.

To access the full script of ASU 2020-08, click here

 

This communication contains a general overview of the topic and is current as of October 15, 2020. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional, who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person’s use of or reliance upon this material. © MNP LLP 2020. All rights reserved.

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.