ASU 2025-05 — Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets

The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when applying the guidance in Topic 326, Financial Instruments–Credit Losses, to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers.

This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2024-ED900 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets for Private Companies and Certain Not-for-Profit Entities, which has been deleted.

For more information see the following:

Issued: July 30, 2025