Derivatives Accounting Carveouts Widened in US Rule Update (2)

Companies gained broadened exceptions Monday to complex derivatives accounting rules.

The Financial Accounting Standards Board published final guidance that aims to reduce the costs and complexity of evaluating whether certain contracts are derivatives under the US rulebook. Companies set to benefit include those with bonds in which interest rates may vary based on sustainability-linked metrics, as well as those with certain types of research and development funding arrangements.

Businesses involved in common transactions can get swept into complicated rules designed for options, warrants, swaps, and other derivatives. Financial statement preparers have noted in feedback to FASB that the broad application ...