The FASB has released an ASU to refine derivative accounting and address diversity in share-based noncash consideration accounting. Stakeholder feedback led to exemptions for certain agreements. The update applies to entities in nonexchange-traded contracts with contingent terms unique to a party, introducing Topic 815 for derivatives and hedging.

New transactions like bonds with performance-based interest payments will be covered under Topic 815. The update aims to simplify contract evaluation, provide accurate financial representation, and reduce diversity in practice. It also clarifies revenue accounting under Topic 606, promoting comparability and reducing complexity and costs for preparers and auditors.

In August 2025, FASB appointed KPMG’s Angie Storm as chief accountant to the EITF, which aids in resolving financial accounting issues. This update aims to enhance accounting standards and improve clarity for investors.

Read more at Yahoo Finance: FASB updates derivative accounting standards