Bridging the GAAP: September 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)

August 26, 2026 Meeting

The Board discussed feedback received in response to the 2025 Invitation to Comment, Agenda Consultation, and other recent stakeholder outreach. The Board decided to add a project on debt modifications and exchanges to its technical agenda.

The Board also discussed a Codification Improvements issue. The issue would have updated paragraph 326-20-30-4 to reflect the unintentionally omitted amendments in Accounting Standards Update No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (Issue 5). Because this change is no longer necessary, the Board directed the staff to draft a proposed Accounting Standards Update (ASU) that does not include this issue for vote by written ballot.

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

FASB Proposed Codification Amendments

On September 2, the FASB proposed amendments to (1) clarify existing guidance, (2) correct errors, or (3) make minor improvements to a broad range of topics in the Accounting Standards Codification. These proposed changes would make the Codification easier to understand and apply. The proposal would apply to all reporting entities in the scope of the affected accounting guidance. Comments are due by November 19, 2026.

FASB Issues Final Guidance on Investment Company Fair Value Measurement

On September 9, the FASB issued an ASU No. 2026-03, Investment Companies with Equity Securities Subject to Contractual Sale Restrictions, that improves how investment companies such as mutual funds measure the fair value of an equity security that is subject to a contractual sale restriction.

“The new standard addresses stakeholder concerns that current guidance can produce fair value measurements that do not reflect how market participants would value equity securities with contractual sale restrictions,” stated FASB Chair Richard R. Jones. “By requiring investment companies to reflect those restrictions in fair value measurement, the ASU better aligns reported amounts with the economics of the restricted shares.”

For investment companies within the scope of ASC 946, Financial Services—Investment Companies, the amendments in the ASU provide an exception to ASC 820, Fair Value Measurement, requiring that a contractual restriction on the sale of an equity security be considered in measuring the fair value of the equity security. The amendments also require those investment companies to disclose the amount of the discount attributable to the contractual sale restriction.

The amendments are effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. An investment company within the scope of ASC 946 can elect to early adopt the guidance on any date on or after issuance of the ASU.

September 16, 2026 Meeting

The Board added a project to its technical agenda on ASC 860, Transfers and Servicing, and decided that the scope of that project would be to identify and address diversity in practice in applying the participating interest guidance. The Board decided not to address the accounting for securities-for-securities lending arrangements as part of that project.

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

September 23, 2026 Meeting

The Board discussed feedback received in response to the 2025 Invitation to Comment, Agenda Consultation, agenda requests, and other Codification improvements related to Topic 944, Financial Services—Insurance, received from stakeholders. The Board decided not to add a project on life insurance and ceded reinsurance issues to its technical agenda. The Board instead directed the staff to conduct additional research on those issues. The Board decided to consider Codification improvements related to Topic 944 as part of the Codification Improvements (Evergreen) project.

The Board discussed its project on fair value hedging and the scope of the portfolio layer method for liabilities.

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

FASB Proposes Amendments to Accounting for Residential Mortgage Servicing Rights

On September 23, the FASB issued a proposed ASU that would require an entity to include all of the servicer’s rights and obligations associated with a residential mortgage servicing contract, including recapture, when measuring its fair value unless those rights and obligations are required to be recognized separately. The amendments are intended to align measurement with market pricing and reduce diversity in practice. Comments are due by November 9.

American Institute of Certified Public Accountants

AICPA Updates Digital Assets Practice Aid

The AICPA updated its practice aid, Accounting for and Auditing of Digital Assets, with new guidance to address emerging developments in the digital asset ecosystem, including accounting for stablecoin issuers, auditing mining revenue arrangements, and updates for recently effective auditing standards.

SEC Regulatory Updates

SEC Proposes to Modernize Rules for Registered Transfer Agents

On September 1, the SEC proposed to update the rules and forms that apply to registered transfer agents. The rule proposal would modernize the federal transfer agent rules, while continuing to facilitate the safe and efficient functioning of the U.S. securities markets and the national clearance and settlement system.

“This proposal would streamline and modernize the Commission’s rules to reflect transfer agents’ current processes and operations, including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares,” said SEC Chairman Paul S. Atkins.

The proposed rule updates reflect the technological environment in which transfer agents operate, including the widespread use of electronic recordkeeping and communications, and the services they provide to issuers, investors, and other market intermediaries. The proposal would amend existing rules and forms, would rescind a rule, and would introduce new rules that apply to registered transfer agents and their activities. 

The proposing release is published on SEC.gov and will be published in the Federal Register. The public comment period will remain open for 60 days after the date of publication in the Federal Register. 

SEC Issues CFIs on Incorporation by Reference in Form S-1

On September 4, the SEC staff issued new Corporation Finance Interpretations (CFIs) that clarify the availability and application of incorporation by reference for Form S-1 registration statements, including when a registrant becomes eligible to incorporate by reference after initially filing the registration statement.

SEC Proposes Rescission of Shareholder Proposal Rule and Reforms to Proxy Solicitation Process

On September 16, the SEC proposed to rescind Rule 14a-8 under the Securities Exchange Act of 1934, which exceeds the scope of the Commission’s statutory authority and intrudes into matters of state law.

The Commission outlined independent policy reasons for its proposed rescission of Rule 14a-8. Many of the justifications for adopting the rule either have not been substantiated in practice or are less compelling today, and the rule has had unintended consequences, including the implication of federal preemption that may have discouraged states from developing their own laws governing shareholder proposals. Rescinding Rule 14a-8 would leave determinations about the role of shareholder proposals to state law and company governing documents.

The Commission also proposed amendments to Rule 14a-4(c) under the Exchange Act to provide companies with greater flexibility and shareholders with greater control regarding proposals for which a company may seek discretionary proxy voting authority.

The Commission separately proposed rule amendments to modernize the proxy solicitation process. Reflecting advancements in technology and current realities of shareholder communications, those amendments would:

• Eliminate the requirement that companies deliver an annual report to security holders.
• Eliminate the delivery deadline when documents are incorporated by reference into a proxy statement.
• Eliminate the requirement and the ability to submit Notices of Exempt Solicitation.
• Shorten the minimum broker search period from 20 business days to five business days.

The public comment periods will remain open for 60 days following the publication of the proposing releases in the Federal Register.