Accounting Standards Update 2025-09: Hedge Accounting Improvements

FASB Accounting Standards Updates

Published January 1st, 2026

Detected March 13th, 2026

Summary

The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2025-09, which provides improvements to hedge accounting. This update aims to enhance the accounting for derivatives and hedging activities under Topic 815.

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What changed

This Accounting Standards Update (ASU) 2025-09, issued by the FASB, introduces significant improvements to the hedge accounting framework under Topic 815. The update focuses on refining the criteria and processes for applying hedge accounting, aiming to provide more faithful representation of hedging activities in financial statements. Key changes are expected to impact how entities assess hedge effectiveness, recognize ineffectiveness, and present hedging information.

Entities that engage in hedging activities will need to review and potentially update their accounting policies and internal controls to align with the new requirements. While the effective date is January 1, 2026, early adoption is permitted. Compliance will require careful consideration of the specific amendments to ensure accurate financial reporting and avoid potential restatements or compliance issues.

What to do next

Review ASU 2025-09 for specific changes to hedge accounting requirements.
Update accounting policies and internal controls related to derivatives and hedging.
Assess the impact of the changes and plan for implementation by the effective date of January 1, 2026, or earlier if adopting early.

Source document (simplified)

ACCOUNTING STANDARDS UPDATE 2025-09—DERIVATIVES AND HEDGING (TOPIC 815): HEDGE ACCOUNTING IMPROVEMENTS

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