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Bridging the GAAP: August 2025

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

FASB Standard Setter Updates

Financial Accounting Standards Board

New ASU Related to the Measurement of Certain Credit Losses

On July 30, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides guidance for estimating credit losses under the current expected credit losses (CECL) model for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The guidance is effective for periods beginning after December 15, 2025, and will be adopted prospectively. Early adoption is permitted.

August 13, 2025 Meeting

The Board discussed feedback received on the proposed Accounting Standards Update, Environmental Credits and Environmental Credit Obligations (Topic 818). The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.

In addition, Chair Jones added a project on digital assets to the Board’s research agenda. This research project will explore targeted improvements to the accounting for and disclosure of certain digital assets and related transactions, including (1) whether certain payment digital assets are cash equivalents and (2) the accounting for certain digital asset transfers, such as crypto lending. The project will consider stakeholder feedback received as part of the FASB’s 2025 Invitation to Comment, Agenda Consultation, including recommendations released in the report issued by the President’s Working Group on Digital Asset Markets.

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

SEC Regulatory Updates

Securities and Exchange Commission

SEC Provides Court with Status on Climate-Related Disclosure Rules 

On July 23, the SEC responded to an April 2025 order from the U.S. Court of Appeals for the Eighth Circuit (the Court) to provide a status report on its plans with respect to its March 2024 climate-related disclosure rules. The rules were voluntarily stayed by the SEC pending the resolution of several legal challenges including whether the SEC had the statutory authority to issue the rules. Although the SEC voted in March 2025 to end its defense of the rules, in its status report, the SEC stated that it has no intention of reviewing or reconsidering the rules at this time and asked the Court to decide the case before the SEC commits to a course of action. The SEC argued that its next steps depend on the outcome of the litigation. The rules remain stayed by the SEC.

SEC Releases Statement on “Liquid Staking” 

On August 5, the SEC’s Division of Corporation Finance (Corp Fin) released a statement providing its views on a specific type of proof-of-stake activity (referred to as “liquid staking”) as part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets. Corp Fin believes that “Liquid Staking Activities” (as defined in the SEC’s statement) do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 or Section 3(a)(10) of the Securities Exchange Act of 1934. The statement does not provide guidance on the accounting for liquid staking arrangements.

Other Regulatory Updates

European Commission Adopts Voluntary Sustainability Reporting Standard for SMEs

On July 30, the European Commission announced its adoption of the voluntary standard for small- and medium-sized enterprises (SMEs) developed by EFRAG (the VSME). The VSME are intended to reduce the administrative burden on SMEs by making it easier for them to respond to requests for sustainability information from large companies and financial institutions subject to mandatory reporting under the Corporate Sustainability Reporting Directive (CSRD).

Rikki Williams

Senior Director | CPA

Rikki is a Senior Director at Centri Business Consulting. He has more than 18 years of public and private accounting experience. View Rikki Williams's Full Bio