Highlights

The FASB issued two final accounting standard updates in Q2 2026: 1) ASU 2026-01 for how to measure paid-in-kind dividends, and 2) ASU 2026-02 for establishing the accounting for environmental credits and environmental credit obligations. Looking ahead, we can expect a final accounting standard update related to accounting for debt exchanges in the last half of 2026.

Final Accounting Standards Issued

• In April 2026, the FASB issued ASU 2026-01—Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. This Update provides guidance on how an issuer should measure paid-in-kind (PIK) dividends on equity-classified preferred stock. Under the new standard, entities are required to measure PIK dividends by multiplying the stated PIK dividend rate by the liquidation preference of the shares. The new standard is applied on either (1) a prospective basis or (2) a modified retrospective basis for instruments that are outstanding as of the adoption date. It is effective for all entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of the annual reporting period that includes that interim period.
• In May 2026, the FASB issued ASU 2026-02—Environmental Credits and Environmental Credit Obligations (Topic 818). This Update provides specific authoritative guidance for the recognition, measurement, presentation, and disclosure of environmental credits and environmental credit obligations. Environmental credits are recognized as assets if the entity intends to use them to settle environmental credit obligations. Environmental credit obligations will be recognized and measured depending on whether an entity holds and expects to use environmental credits to settle that obligation. The new standard will be effective for annual reporting periods beginning after December 15, 2027 for public business entities, and annual reporting periods beginning after December 15, 2028 for all other entities. Early adoption is permitted. Entities are required to adopt the Update on a retrospective basis by recognizing a cumulative effect adjustment to retained earnings at the adoption date.

Exposure Drafts

The following exposure drafts are open for comment as of June 30, 2026:

Taxonomy Updates

• The FASB issued for comment proposed GAAP Taxonomy Improvements for a Proposed Accounting Standards Update— Compensation—Retirement Benefits—Defined Benefit Plans—Pension (Subtopic 715-30): Discount Rate Used to Measure the Benefit Obligation for Certain Market-Return Cash Balance Plans. The comment period ends on August 10, 2026.

Meetings

The following summarizes the various meetings with the FASB. Full recaps and more details can be found at FASB.org.

• The FASB met on April 15, 2026 to discuss the accounting for transfers of crypto assets and classification of certain digital assets as cash equivalents.
• The FASB met on April 22, 2026 to discuss the definition of a public business entity and extending the portfolio layer method to financial liabilities.
• The FASB met on May 13, 2026 to discuss investment company accounting and disclosure, targeted improvements to equity method of accounting, accounting for and the disclosure of intangibles, and nonrefundable transferable tax credits.
• The Public Markets Advisory Committee (PMAC) met on May 14, 2026 to discuss FASB update, indexation-debt and equity, accounting for crypto assets, consolidation and definition of common control, hedge accounting, equity method of accounting, and use of technology in standard setting.
• The FASB met on May 27, 2026 to discuss accounting for commodities, mortgage servicing rights- recapture, and subjective acceleration clauses.
• The Investment Advisory Committee (IAC) met on May 28, 2026 to discuss emerging issues and trends, cash equivalents and certain digital assets, hedge accounting, disaggregation of income statement expenses, and borrower’s accounting for debt restructurings.
• The Private Company Council (PCC) met on June 1, 2026 and June 2, 2026 to discuss PCC Agenda Priorities, various PCC Research Projects, subjective acceleration clauses, indexation-debt and equity, definition of common control, digital asset projects, equity method of accounting, and FASB Agenda Consultation.
• The FASB met on June 3, 2026 to discuss indexation-debt and equity.
• The FASB met on June 11, 2026 to discuss feedback on non-profit issues, earnings per share, and statement of cash flows.
• The FASB met on June 17, 2026 to discuss contractual sale restrictions held by investment companies.
• The FASB met on June 24, 2026 to discuss the hedge accounting research project, codification improvements related to LIBOR references, and financial key performance indicators for business entities.