The Financial Accounting Standards Board has released its long-awaited hedging standard, the final component of its financial instruments convergence project with the International Accounting Standards Board.
The accounting standards update has been in the works since 1998, when FASB last issued a standard for hedge accounting activities. After it agreed in 2002 to begin working with the IASB on converging accounting standards, FASB issued two exposure drafts in 2008 and 2010 on hedge accounting. However, after the comment period ended for the 2010 proposals, the project to improve hedge accounting guidance was put on hold to give FASB time to pursue other financial instrument initiatives. After FASB and the IASB diverged on issues such as accounting for impaired loans, the IASB issued a single set of International Financial Reporting Standards for financial instruments in IFRS 9 in July 2014. FASB then issued its standards under U.S. GAAP for the recognition and measurement of financial instruments in January 2016 and for credit losses in June 2016.
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