FASB Issues Staff Q&A Document on Hedge Accounting during COVID-19 Pandemic
Norwalk, CT, April 28, 2020—The Financial Accounting Standards Board (FASB) staff today issued a question-and-answer document (Q&A) that responds to frequently asked questions about the disruptive effects of COVID-19 on cash flow hedge accounting.
FASB Accounting Standards Codification® Topic 815, Derivatives and Hedging, provides guidance on when to discontinue cash flow hedge accounting and when and how to reclassify amounts deferred in accumulated other comprehensive income (AOCI) to earnings.
In recent weeks, stakeholders have asked how the postponement or cancellation of forecasted transactions related to the effects of the COVID-19 pandemic should be considered when applying cash flow hedge accounting under Topic 815. The FASB staff developed this Q&A to provide guidance on this unique and evolving situation, based on the information and feedback they’ve received to date.
The FASB staff will continue to monitor questions and communicate with stakeholders through additional statements, technical inquiries, and other means, as appropriate.
The Q&A is available at www.fasb.org.