January 1, 2026

Highlights

In the fourth quarter of 2025, the FASB issued five final accounting standard updates: 1) ASU 2025-08 improves the accounting for purchased loans, 2) ASU 2025-09 clarifies certain aspects of hedge accounting, 3) ASU 2025-10 establishes guidance on government grant accounting, 4) ASU 2025-11 improves the guidance for interim reporting, and 5) ASU 2025-12 clarifies certain topics in the Codification.

Public calendar-year-end companies must adopt the new tax disclosures in ASU 2023-09 for their 2025 Form 10-K. In Q1 2026, ASU 2024-04 and ASU 2025-05 become effective for public calendar year-end companies. Affected companies must evaluate the accounting impact of adoption.

Final Accounting Standards Issued

• In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans. The new standard requires that purchased seasoned loans be accounted for using the gross-up approach, thereby enhancing comparability and consistency in the accounting for acquired financial assets. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The new standard is to be applied prospectively to loans that are acquired on or after the initial applicable date.
• In November 2025, the FASB issued 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The new standard clarifies guidance related to five areas: 1) similar risk assessment for cash flow hedges, 2) hedging interest payments on choose-your-rate debt, 3) cash flow hedges of nonfinancial forecasted transactions, 4) net written options as hedging instruments, and 5) foreign currency- denominated debt designated as a hedging instrument and a hedged item. ASU 2025-09 is effective for public business entities in annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those reporting periods. For entities other than public business entities, the standard is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those reporting periods. Early adoption is permitted for all entities. The new standard is to be applied on a prospective basis for all hedging relationships. Entities may elect to adopt the new standard for existing hedging relationships as of the adoption date.
• In December 2025, the FASBissued 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The new standard establishes the accounting for a government grant received by a business entity, including the recognition, measurement, and presentation of grants related to an asset and grants related to income. ASU 2025-10 is effective for public business entities for annual reporting periods beginning after December 15, 2028, and for interim reporting periods within those reporting periods. For entities other than public business entities, the standard is effective in annual reporting periods beginning after December 15, 2029, and interim reporting periods within those reporting periods. Early adoption is permitted for all entities. Entities may apply the guidance in ASU 2025-10 by using one of the following transition methods: 1) Modified prospective approach (no prior periods restated and no cumulative effect adjustment), 2) Modified retrospective approach (cumulative effect adjustment and prior period restatement for government grants not complete as of the earliest period presented), and 3) Full retrospective approach.
• In December 2025, the FASBissued 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The new standard clarifies and improves the interim disclosure requirements and the applicability of Topic 270 and establishes a principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for public business entities in interim reporting periods beginning after December 15, 2027. For entities other than public business entities, the standard is effective in interim reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities.
• In December 2025, the FASBissued 2025-12, Codification Improvements. The new standard clarifies a wide variety of Topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The amendments are not intended to result in significant changes for most entities. ASU 2025-12 is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The new standard should be applied either prospectively to all transactions on or after the adoption date, or retrospectively to the beginning of the earliest comparative period.

Exposure Drafts

There were no exposure drafts open for comment as of 12/31/25.

Taxonomy Updates

• The FASB announced the availability of the 2026 GAAP Financial Reporting Taxonomy (GRT), the 2026 SEC Reporting Taxonomy (SRT), and the 2026 GAAP Employee Benefit Plan Taxonomy (EBPT). The FASB also announced the availability of the 2026 DQC Rules Taxonomy (DQCRT) and the 2026 GAAP Meta Model Relationships Taxonomy (MMT), which, together with the GRT, the SRT, and the EBPT are collectively referred to as the “FASB Taxonomies.” The 2026 GRT, 2026 SRT, and 2026 EBPT are expected to be accepted as final by the SEC in early 2026.

Meetings

The following summarizes the FASB meetings during the quarter. Full recaps and more details are available at FASB.org.

• The Not-for-Profit Advisory Committee (NAC) met on October 7, 2025, to discuss emerging financial reporting issues, FASB agenda consultation, accounting for and disclosure of intangibles, select projects and other research, and recently issued and forthcoming ASUs.
• The FASB met on October 8, 2025, to discuss the feedback received on the Invitation to Comment, Agenda Consultation.
• The FASB met on October 22, 2025, to discuss the post-implementation review activities performed for Topic 842, Leases.
• The FASB met on October 29, 2025, to discuss recent stakeholder feedback on the accounting for digital assets, and whether to add a project related to the classification of stablecoins and other similar assets.
• The FASB met on November 12, 2025, to decide whether to add a project related to the equity method of accounting, renewable energy partnerships, or both.
• The FASB met on November 19, 2025, to discuss whether to add a project related to the accounting for crypto asset transfers, including expanding the scope of Subtopic 350-60, clarifying the derecognition guidance for transfers of crypto assets, or both.
• The Financial Accounting Standards Advisory Council (FASAC) met on December 2, 2025, to discuss current hot topics, risk management and hedge accounting, the implementation of recent standards, and the effects of the use of technology on standard setting.
• The Private Company Council (PCC) met on December 11, 2025 and December 12, 2025, to discuss PCC agenda priorities, PCC Research project related to debt modifications and extinguishments, PCC Research project related to Leases, PCC Research project related to subjective acceleration clauses, equity method of accounting, digital assets, effects of use of technology on standard setting, FASB credit losses post-implementation review, and recently issued and forthcoming accounting standard updates.
• The FASB met on December 17, 2025, to discuss the initial measurement of paid-in-kind dividends on equity-classified preferred stock.

Upcoming Effective Dates

Guidance effective as of January 1, 2026, for calendar year-end public business entities (PBEs):