News Release 09/12/19

FASB Issues Revised Proposal to Improve Balance Sheet Debt Classification

Incorporates private company and other stakeholder input on original 2017 proposal

Norwalk, CT, September 12, 2019—The Financial Accounting Standards Board (FASB) today issued a proposed Accounting Standards Update (ASU) intended to improve guidance used to determine whether debt should be classified as a current or noncurrent liability in a classified balance sheet. Stakeholders are encouraged to review and comment on the proposed ASU by October 28, 2019.

“The proposed ASU incorporates feedback from stakeholders, including private companies, on our earlier proposal to improve this area of financial reporting,” stated FASB Chairman Russell G. Golden. “With these revisions, the FASB believes the proposed ASU further clarifies the guidance for balance sheet classification of debt and would provide more consistent and transparent information to financial statement users.”

In January 2017, the FASB issued its first proposal on the project, which contained provisions to replace the current, fact-specific guidance with an overarching, cohesive principle for determining whether debt, or other instruments within the scope of the proposal, should be classified as a current or noncurrent liability as of the balance sheet date.

Much of the guidance in this revised proposal is similar to the original 2017 proposal on which the Board has received extensive feedback. Based on input received from stakeholders—including the Private Company Council—the Board added proposed requirements related to unused long-term financing arrangements, such as a line of credit, and grace periods. The revised proposal reflects and seeks comments on these changes, as well as the expected costs and expected benefits of the proposed amendments.

The proposed ASU is available at

About the Financial Accounting Standards Board

Established in 1973, the FASB is the independent, private-sector organization, based in Norwalk, Connecticut, that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP). The FASB is recognized by the Securities and Exchange Commission as the designated accounting standard setter for public companies. FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA). The FASB develops and issues financial accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to investors and others who use financial reports. The Financial Accounting Foundation (FAF) supports and oversees the FASB. For more information, visit