Accounting News

Thursday, April 19, 2012
Two New Agreements on Accounting Standards

At a meeting on April 17th, the IASB and FASB and tentatively agreed on two classifying models for financial assets.

The first is agreement was on business model assessment for amortized cost classification for financial assets. The financial assets would qualify for amortized cost if the assets are held within a business model whose objective is to hold the assets in order to collect contractual cash flows.

The second agreement was on bifurcation of financial assets.The agreed that financial assets that contain cash flows that are not solely principal and interest would not be eligible for bifurcation. Rather, they would be classified and measured in their entirety at fair value through net income.

Meeting are ongoing so we expect more agreements going forward.

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