Share

Bridging the GAAP: October 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

Exposure Draft on Initial Measurement of Paid-in-Kind Dividends

On September 30, the FASB issued an exposure draft on how an issuer of equity-classified preferred stock (including preferred stock that is classified as temporary equity in accordance with SEC guidance) should initially measure dividends that are satisfied by either issuing additional preferred stock with the same terms or by increasing the liquidation value of the original preferred stock. Under the proposal, such “paid-in-kind” or “PIK” dividends would be initially measured based on the contractual terms of the preferred stock, including the stated PIK dividend rate. The proposal would not affect when to recognize or the subsequent measurement of PIK dividends.

The new guidance would apply to all entities and would be able to be adopted prospectively or on a modified retrospective basis for instruments outstanding at the initial application date. An effective date has not been set yet, but early adoption would be permitted. Comments are due by October 27.

October 8, 2025 Meeting

The Board discussed feedback received on the Invitation to Comment, Agenda Consultation, which was issued for public comment on January 3, 2025. The Board made no decisions.

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

SEC Regulatory Updates

Securities and Exchange Commission

Guidance on SEC Operational Status During Shutdown

On October 1, the SEC announced it had implemented the agency’s plan for operating during a government shutdown. The operating plan will continue until the lapse in appropriations is resolved. The SEC’s Division of Corporation Finance also issued guidance (last updated October 9) noting that a limited number of staff members are available to assist companies with matters relating to fee calculations and emergency filing relief. During the shutdown, the SEC’s EDGAR system remains operational and companies are still required to make timely disclosures and filings in accordance with the federal securities laws; however, the SEC will not be able to declare registration statements effective or respond to waiver requests. For the latest updates, visit the SEC website.

Other Regulatory Updates

California Air Resources Board (CARB)

Given the large volume of public comments received and given ongoing input related to identifying the range of covered entities, the CARB is delaying initial rulemaking for California climate disclosure laws Q1 2026. The delay does not change compliance dates. The CARB is continuing to take feedback on the draft reporting template for Scope 1 and Scope 2 GHG emissions at CARB’s public docket through October 27, 2025. Feedback related to the preliminary list of covered entities can be submitted through an online survey. Other comments or inquiries can be submitted to Climatedisclosure@arb.ca.gov.

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