Accounting Rules on Risk Management Set for Rethink by US Board

Banks and insurance companies calling for changes in how they report risk management activities won an early victory Wednesday as accounting rulemakers agreed to tinker with the guidance.

The Financial Accounting Standards Board voted unanimously to add a shorter-term project on hedge accounting to their technical agenda tackling key issues raised by public feedback. The special accounting method was a hot topic during last year’s agenda outreach, with companies and trade groups alike pushing for ways to simplify rules they say are costly and time-consuming to apply.

Hedge accounting is an elective accounting practice companies use to mitigate earnings volatility. ...