The updated standard, issued in 2016, introduced the current expected credit losses (CECL) method for measuring credit losses on financial assets measured at amortized cost. It also mandated that available-for-sale debt securities must be assessed individually for credit losses when fair value is less than the amortized cost basis.

Some financial statement preparers noted that those who elect (or are planning to elect) the fair value option on newly originated or purchased financial assets, which were previously measured at amortized cost, would have to maintain dual measurement methods—both fair value measurement and amortized cost basis. The ASU lets preparers irrevocably elect the fair value option, on an instrument-by-instrument basis, for eligible financial assets measured at amortized cost basis once they adopt the credit losses standard.

The new ASU is available online at