The FASB has issued ASU 2022-04, Liabilities – Supplier Finance Programs that is intended to enhance the transparency of these arrangements in a buyer’s financial statements. Under the new guidance, a buyer entity is required to disclose, among other things, the key terms of the program, including the timing of payments and assets pledged as security and quantitative information regarding confirmed obligations, including a rollforward of the obligations and amounts subsequently paid. The ASU does not affect the recognition, measurement, or financial statement presentation of these obligations.

The ASU is effective for interim and annual periods beginning after December 15, 2022, except for the rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The ASU is to be applied retrospectively, except for the rollforward provisions, which should be applied prospectively.

^{Readers should not act upon information presented without individual professional consultation.}