Northern Trust announced new tools intended to help institutional clients address recent accounting rules and disclosure requirements adopted in the U.S. by the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB), related to investments in derivatives, hedging activities, valuations, major asset categories and various risk exposures of certain investments.
The reporting enhancements aim to help institutional clients respond to FSP FAS 132(R) -1, which requires further detail on major asset categories, valuation and various risks of certain investments; FAS 161, which expands the disclosure requirement for derivative instruments and related hedged items; and GASB 53, which provides guidance for the measurement, recognition and disclosure of derivative instruments.
We remain engaged in the changes to accounting and financial reporting standards, and strive to provide clients with new reports to assist them with analyzing their portfolios and preparing financial disclosures as these requirements evolve, says Debra Clayton, client reporting product manager for Northern Trust.
* FSP FAS 132(R) -1, now incorporated into FASB ASC Topic 715, Compensation-Retirement Benefits, requires non-governmental benefit plan sponsors to disclose additional information regarding the fair valuation of benefit plan assets, including pricing information on Level 3 positions and a Level 3 market value reconciliation, an explanation of investment policies and strategies, and detail on concentration of risk in the portfolio.
* FAS 161, now incorporated into FASB ASC Topic 815, Derivatives and Hedging, expands the disclosure requirements for derivative instruments and related hedged items for non-governmental entities. It requires disclosure of objectives and strategies for using derivatives, fair values of derivatives, associated gains and losses, and details on the various risks associated with derivative investments.
* GASB 53, Accounting and Financial Reporting for Derivative Instruments, provides guidance to certain state and local governmental entities for the measurement, recognition and disclosure of derivative instruments, and also requires entities to explain how and why derivative instruments and hedging activities are being used in investment portfolios.
Northern Trust’s Valuation Toolkit consists of Level Determination Reports, Level 3 Rollforward Reports and various pricing related documents that provide clients with details related to the securities within their portfolio. New reports are also available related to derivatives holdings, earnings and various risk exposures. Available via Northern Trusts single operating platform, the toolkit enhancements are fully integrated into client reporting packages.
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