Accounting Pronouncements Adopted
On
December 26, 2021
we adopted Accounting Standards Update (“ASU”) No. 2021 – 08, “Accounting
for
Contract Assets and Contract Liabilities from Contracts with Customers”
(Subtopic 805), as early adoption of this
ASU was permitted.
ASU 2021 – 08 requires an acquirer to recognize and measure
contract assets and contract
liabilities acquired in a business combination in accordance with Topic 606.
At the acquisition date, an acquirer
should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.
To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the
acquired revenue contracts.
Generally, this should result in an acquirer recognizing and measuring the acquired
contract assets and contract liabilities consistent with how
they were recognized and measured in the acquiree’s
financial statements.
Our
adoption
of ASU 2021 - 08 did not have a material impact on our consolidated
financial
statements.
Recently Issued Accounting Standards
In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, “Reference Rate
Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which provides
optional expedients and exceptions for applying U.S. GAAP to contracts,
hedging relationships and other
transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or
by another
reference rate expected to be discontinued because of reference rate reform.
The guidance was effective beginning
March 12, 2020 and can be applied prospectively through December 31,
2022.
In January 2021, the FASB issued
ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”).
ASU 2021-01 provides temporary
optional expedients and exceptions to certain guidance in U.S. GAAP
to ease
to ease the financial reporting burdens related
to the expected market transition from LIBOR and other interbank offered rates
to alternative reference rates, such
as the Secured Overnight Financing Rate.
The guidance is effective upon issuance, on January 7, 2021, and can be
applied through December 31, 2022.
We do not expect that the requirements of this guidance will have a material
impact on our consolidated financial statements.
In March 2022, the FASB issued ASU No. 2022-01, “Derivatives and Hedging (Topic 815): Fair Value
Hedging –
Portfolio Layer Method,” which will expand companies' abilities
to hedge the benchmark interest rate risk of
portfolios of financial assets (or beneficial interests) in a fair value hedge.
This ASU expands the use of the
portfolio layer method (previously referred to as the last-of-layer
method) to allow multiple hedges of a single
closed portfolio of assets using spot starting, forward starting and amortizing-notional
swaps.
It also permits both
prepayable and non-prepayable financial assets to be included in the closed
portfolio of assets hedged in a portfolio
layer hedge.
This ASU further requires that basis adjustments not be allocated
to individual assets for active
portfolio layer method hedges, but rather be maintained on the closed portfolio
of assets as a whole.
ASU 2022 –
01 is effective for fiscal years beginning after December 15, 2022, including interim periods
within those fiscal
years.
Early adoption is permitted for any entity that has adopted the amendments
in ASU 2017-12.
We do not
expect that the requirements of this guidance will have a material impact
on our consolidated financial statements.
In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled
Debt Restructuring and Vintage Disclosures”.
The amendments in this ASU eliminate the accounting guidance
for
troubled debt restructurings by creditors that have adopted the Current Expected
Credit Losses model and enhance