ASC

Accounting Standards Update · 2022

ASU 2022-01 — Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method

Affects815 Derivatives and Hedging
The amendments in this Update expand the current last-of-layer method of hedge accounting that permits only one hedged layer to allow multiple hedged layers of a single closed portfolio. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method.
Additionally, amendments in this Update:
  1. 1
    Expand the scope of the portfolio layer method to include nonprepayable assets
  2. 2
    Specify eligible hedging instruments in a single-layer hedge
  3. 3
    Provide additional guidance on the accounting for and disclosure of hedge basis adjustments
  4. 4
    Specify how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio.
This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2021-002—Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method, which has been deleted.
Accounting Standards Update No. 2022-01 (PDF)
Issued: March 28, 2022

Text as published in the FASB Accounting Standards Codification, Basic View.