Paragraph superseded on 04/13/2010 after the end of the transition period stated in FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133.
Paragraph superseded on 03/23/2010 after the end of the transition period stated in FASB Staff Position No. FAS 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161.
Paragraph superseded on 07/01/2010 after the end of the transition period stated in EITF Issue No. 07-5, \"Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock.\"
Paragraph superseded on 07/01/2010 after the end of the transition period stated in EITF Issue No. 08-8, \"Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That Is Based on the Stock of an Entity's Consolidated Subsidiary.\"
Paragraph superseded on 03/15/2011 after the end of the transition period stated in Accounting Standards Update No. 2010-11, Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.
Paragraph superseded on 07/05/2017 after the end of the transition period stated in Accounting Standards Update No. 2015-13, Derivatives and Hedging (Topic 815): Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets.
The following represents the transition and effective date information related to Accounting Standards Update No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract:Effective date and early adoption
- a
All entities shall apply the pending content that links to this paragraph for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.
- b
Early adoption of the pending content that links to this paragraph is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity early adopts the pending content that links to this paragraph in an interim reporting period, it shall apply the pending content as of the beginning of the annual reporting period that includes that interim reporting period. If an entity early adopts the pending content that links to this paragraph, it also shall early adopt the pending content that links to paragraph 606-10-65-3 simultaneously.
Transition method
- c
An entity shall apply the pending content that links to this paragraph using one of the following transition methods:
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Prospectively to new contracts entered into on or after the date of adoption.
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On a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption.
- d
If an entity applies the transition method in (c)(2) and the entity had contracts or embedded features that were accounted for as derivatives but are no longer accounted for as derivatives as a result of applying the pending content that links to this paragraph, the entity has an option as of the beginning of the annual reporting period for which the pending content is adopted to elect to apply the fair value option on an instrument-by-instrument basis and measure the contract in its entirety at fair value with changes in fair value recognized in earnings if that instrument is within the scope of paragraph 825-10-15-4. For financial liabilities, an entity shall present separately in accumulated other comprehensive income the portion of the total change in the fair value of the liability that results from a change in the instrument-specific credit risk. If an entity had previously elected the fair value option for contracts that contained embedded derivatives that otherwise would have been bifurcated but are no longer required to be bifurcated as a result of applying the pending content that links to this paragraph upon adoption, the entity has an option on an instrument-by-instrument basis to revoke the fair value option as of the beginning of the annual reporting period for which the pending content is adopted and measure the contract in accordance with other generally accepted accounting principles. For those instruments for which the entity elects or revokes its election of the fair value option, the effects of initially complying with the pending content that links to this paragraph shall be reported as a cumulative-effect adjustment directly to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the annual reporting period in which the pending content is adopted.
Transition disclosures
- e
An entity that applies the transition method in (c)(1) shall disclose the nature of and reason for the change in accounting principle in both the interim reporting period and the annual reporting period in which the entity adopts the pending content that links to this paragraph.
- f
An entity that applies the transition method in (c)(2) shall disclose the following in both the interim reporting period and the annual reporting period in which the entity adopts the pending content that links to this paragraph:
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The nature of and reason for the change in accounting principle
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The cumulative effect of the change on retained earnings or other components of equity or net assets in the statement of financial position as of the beginning of the annual reporting period of adoption and a description of the financial statement line items affected by the adjustment.