Bridging the GAAP: June 2026

Centri’s Bridging the GAAP newsletter highlights this month’s news, developments and emerging issues in the accounting and financial reporting world. 

Standard Setter Updates

Financial Accounting Standards Board (FASB)

June 3, 2026 Meeting

The Board discussed the Indexation—Debt and Equity project. The Board clarified what is intended by the entity’s own operations or activities variable, among other decisions. Further, the Board decided to remove the down round feature scope exception in ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, including any down round feature specific guidance in ASC 260, Earnings Per Share, and ASC 505, Equity. The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot and decided that the proposed Update should have a 60-day comment period.

For more information, see the FASB’s Tentative Board Decisions.

FASB Proposes Improvements in Accounting Guidance for Certain Market-Return Cash Balance Plans

On June 10, the FASB issued a proposed ASU intended to improve accounting guidance for certain market-return cash balance plans. The proposal, based on an EITF recommendation, addresses diversity in practice and concerns that current guidance may not reflect the economics of these plans, which can create mismatches between measured obligations and plan balances. The FASB proposed to require an entity to use the assumed interest crediting rate as the discount rate to measure the benefit obligation for certain market-return cash balance plans, so that the obligation would generally equal the plan’s hypothetical account balances.

Comments are due by August 10.

June 11, 2026 Meeting

The Board discussed stakeholder feedback received on the statement of cash flows, including feedback received as part of the 2025 Invitation to Comment, Agenda Consultation (2025 ITC). The Board provided suggestions on and observations about the focus and prioritization for continued research efforts. The Board made no decisions.

The Board also discussed feedback received in response to the 2025 ITC, Agenda Consultation, an unsolicited comment letter, and a recent technical inquiry and other feedback and decided not to add a project to its technical agenda on earnings per share at this time.

For more information, see the FASB’s Tentative Board Decisions.

June 17, 2026 Meeting

The Board continued its deliberations on the Investment Companies—Contractual Sale Restrictions project and made the following decisions. The Board decided to require that an investment company disclose the discount attributable to the contractual sale restriction in the notes to financial statements for both interim and annual reporting periods. The Board decided that the new guidance would apply only to contractual sale restrictions on equity securities. The Board decided to require that an investment company apply the new guidance prospectively to all investments in equity securities, with any adjustments from the adoption of the amendments recognized immediately in earnings.

The Board also decided to require that an investment company disclose the amount recognized as an adjustment in earnings in the period that the investment company first applies the new guidance.

The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot and decided that the proposed Update should have a 15-day comment period.

FASB Proposes Targeted Improvements to Hedge Accounting Guidance

On June 17, the FASB issued a proposed ASU intended to more closely align the interest rate risk and net investment hedging accounting guidance with certain entities’ risk management activities. The targeted improvements would permit an entity to hedge interest rate risk for held-to-maturity (HTM) debt securities, amend the current GAAP definition of the secured overnight financing rate (SOFR) overnight index swap rate to permit designation of any tenor of SOFR as a benchmark interest rate, and expand the population of eligible net investment hedging instruments by permitting the use of certain float-to-float cross currency swaps with different reset dates. The proposed amendments would apply to any entity that elects to apply hedge accounting.

Comments are due by August 17.

International Accounting Standards Board (IASB)

IASB Issues IFRS 20 to Improve Financial Reporting for Companies Subject to Rate Regulation

On May 27, the IASB issued IFRS 20, Regulatory Assets and Regulatory Liabilities, applicable for companies subject to a specific type of rate regulation. It aims to help investors better understand how that rate regulation affects a company’s financial performance, financial position, and its prospects for future cash flows. IFRS 20 supplements the information a company provides when applying IFRS 15, Revenue from Contracts with Customers, and replaces IFRS 14, Regulatory Deferral Accounts.

It is effective for annual reporting periods beginning on or after January 1, 2029. Early adoption is permitted.

SEC Regulatory Updates

SEC Seeks Public Input on Modernizing IPOs

On May 26, SEC Chairman Paul Atkins announced the SEC is seeking feedback on how to modernize initial public offerings (IPOs). Chairman Atkins specifically referenced rules relating to communications ahead of an IPO, but also expressed an interest in hearing feedback on other IPO-related rules as well as potential roadblocks to non-traditional paths to going public. 

Comments are due by July 27. For more information, see the SEC’s website.

SEC Proposes Rescission of Climate-Related Disclosure Rules

On May 29, the SEC proposed to rescind its 2024 rules that require certain climate-related information in registration statements and annual reports. The rules have been held in abeyance since September 2025 pending the SEC’s determination of next steps. The SEC cited its belief that the rules exceed the scope of the agency’s statutory authority and concerns related to the cost of compliance among the reasons for the proposed recission.

Comments on the proposal are due by August 3.

SEC Publishes Draft Strategic Plan for Public Comment

On June 2, the SEC published for public comment a Draft Strategic Plan that focuses on returning the agency to the core mission set by Congress more than 90 years ago: protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation.

Comments are due by July 2. For more information, see the SEC’s website.