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Bridging the GAAP: October 2026

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 (FASB)

October 7, 2026 Meeting

The Board discussed feedback received on several topics related to Topic 606, Revenue from Contracts with Customers, in response to the 2025 Invitation to Comment, Agenda Consultation, and an agenda request.

The Board directed the staff to conduct additional research on (1) the presentation of net revenue in the income statement for assets measured at fair value, (2) the interaction between Topic 460, Guarantees, and Topic 606 for guarantees of an entity’s own future performance, and (3) the assessment of whether a distinct good or service is obtained in the context of accounting for consideration payable to a customer.

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

SEC Regulatory Updates

Securities and Exchange Commission

SEC Staff Issues Statement on Fair Value Measurement and Disclosure Considerations for Private Assets

On September 28, the SEC’s Office of the Chief Accountant and Division of Investment Management issued a statement emphasizing the importance of rigorously applying the guidance in ASC 820, Fair Value Measurement, as private credit and other private assets continue to grow across investment portfolios. The SEC staff noted that fair value estimates for these predominantly Level 3 investments need to be grounded in market participant assumptions, supported by robust calibration practices, and based on timely, relevant information.

The SEC staff also reminded registrants and auditors that entity-specific disclosures are critical to transparent financial reporting and should address valuation techniques, significant unobservable inputs, valuation uncertainty, nonaccrual positions, payment-in-kind interest and portfolio risk characteristics. The statement offers reminders of  the importance of targeted and transparent disclosure. 

SEC Proposes Amendments to Expand Responsible Retailization of Private Markets

On September 30, the SEC proposed amendments under the Investment Company Act of 1940 related to regulated closed-end funds, including interval funds. The proposed amendments would modernize the interval fund framework by (1) providing greater flexibility on the timing and frequency of repurchase offers and (2) replacing the current prescriptive liquidity requirements with a principles-based approach. The proposal would also permit registered closed-end funds and business development companies (BDCs) to issue multiple classes of shares and charge asset-based distribution and service fees without obtaining individual exemptive relief. 

At the same meeting, the SEC proposed amendments under the Investment Advisers Act of 1940 to expand the ability of registered investment advisers to receive performance-based compensation from registered investment companies and BDCs. Among other conditions, performance-based compensation would be limited to 20% of a fund’s net gains and would require approval by the fund’s board. The proposal would also broaden the rule’s “qualified client” definition to include “accredited investors” under Regulation D and eliminate the existing separate net worth and assets-under-management tests.  

Separately, the SEC is seeking comment on additional professional credentials that could qualify an individual as an accredited investor.

Comments on each proposal will be due 60 days after publication in the Federal Register. 

SEC Proposes Custody Rule Amendments to Address Crypto Asset Custody

On October 1, the SEC proposed new rules and amendments to provide a tailored framework for the custody of crypto assets for registered investment advisers and regulated funds. The SEC’s proposal would modernize custody rules and expand investor choice by removing regulatory barriers that inhibit the adviser’s ability to provide crypto-related investment advice. It would also allow regulated funds to offer clients access to a wider range of crypto asset-related investment strategies.

The proposed rules and amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 would better address current industry practices and update a number of requirements relating to, among other things, financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds. The proposal would also permit crypto assets to be held in self-custody under certain circumstances and allow the use of state trust companies as custodians for client and regulated fund crypto assets. 

The public comment period will remain open for 60 days following the publication of the SEC’s proposing release in the Federal Register.

SEC Proposes Expanding Securities Eligible for Cross Trading by Registered Funds

On October 9, the SEC proposed amendments to the Investment Company Act “cross-trading rule,” which permits transactions in securities between a registered fund and its affiliates under certain conditions. The proposed amendments would modernize and expand the cross-trading rule and would allow cross trades that are beneficial to registered funds and their shareholders (e.g.,  reducing a fund’s trading costs), subject to enhanced investor protection measures.

The proposed amendments would restore the ability to cross trade most fixed-income securities and modernize the rule’s conditions, including those related to pricing and oversight of cross trades. These modernizations would, among other things, recognize market developments that have led to pricing that is more verifiable and transparent. The proposal would also require aggregated reporting of trading activity and cross trades by registered funds that engage in cross trading to provide additional transparency.

The proposal will be published on SEC.gov and in the Federal Register. The comment period will remain open for 60 days after publication in the Federal Register.

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