FASB issued an Accounting Standards Update (ASU) on Thursday, Sept. 29, designed to enhance transparency around supplier finance programs.
ASU No. 2022-04 is effective for fiscal years beginning after Dec. 15, 2022, including interim periods within those fiscal years. A roll-forward amendment in the ASU is effective for fiscal years beginning after Dec. 15, 2023.
Companies that use a supplier finance program in connection with the purchase of goods or services will need to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and its potential magnitude. Learn more.