FASB moves to shorten amortization for some debt securities

The board wants better alignment for bond-interest income.

A proposed FASB accounting standard would shorten the amortization period for callable debt securities purchased at a premium.

The proposal would require the premium to be amortized to the earliest call date. The proposal would not require an accounting change for securities purchased at a discount; the discount would continue to be amortized to maturity.

Under the proposal, an entity would apply the proposed amendments through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. An entity would provide disclosures about a change in accounting principle in the period of adoption.

This approach is meant to more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities.

SPONSORED REPORT

Cybersecurity threats proliferating for midsize and smaller businesses

This report details how SMBs can properly protect private information from breaches, design and implement a cybersecurity policy, and create safeguards for training and education.

CHECKLIST

Being responsive to clients

CPAs and their firms have daily pressures and hectic schedules, but being responsive is crucial to client satisfaction. Leaders in the profession offer advice for CPA firms that want to be responsive to clients.

QUIZ

Test yourself on these often confused words

The spelling checker on your word processing program can do only so much to flag problems. Your best insurance is to learn the troublesome words that trip up writers and use them correctly by the standards of formal, written English.