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As a reminder to our financial services clients, the updated accounting standard ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate New Asset Value per Share (or Its Equivalent), is effective for reporting periods beginning after December 15, 2016. This means that assets and liabilities, for which fair value is measured using net asset value per share as a practical expedient, do not need to be categorized within the fair value hierarchy in the financial statement disclosures.
This is important because it eliminates the diversity in practice – with regards to which level these investments measured at net asset value per share with future redemption dates — were categorized. Currently, these investments are classified in the hierarchy based on when the investment is redeemable. There wasn’t a hard rule, however, as to what length of time corresponded to which level.
Early adoption is permitted, so this can be applied to your 2016 financial statements.
For our non-audit clients, we can prepare your financial statements and other reports to assist with your audit and we will incorporate this new ASU if it is applicable to your situation.
Contact your Untracht Early advisor if you have questions.