FASB will not eliminate HTM classification 

The Financial Accounting Standards Board in December rejected several agenda requests, including voting unanimously to reject a request to eliminate the held-to-maturity classification for debt securities. Before the vote, board members highlighted their reasons for rejecting the request, indicating that the current classification model, including HTM, is the preferred model and should not be eliminated.  

During the meeting, FASB members indicated that most investors were “comfortable [that]the classifications stay and [that]they understand them.” Certain members also observed that the “failures didn’t have anything to do with HTM accounting” and “it not clear there is a problem to fix.” 

The board further rejected projects to address a technical issue arising from income tax rate changes and accounting for commodities. It also considered the staff recommendation to add other HTM-related projects to the technical agenda, including hedging HTM. While the board voted 5-2 against adding the project now, this was due to a general view based on prioritization and the board’s choice to not pursue a broader project to address hedge accounting overall. The board also indicated that research currently being conducted by their staff may result in a larger project that addresses disclosures related to interest rate risk and liquidity.   

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