The FASB issued ASU 2020-03 Codification Improvements to Financial Instruments in order to improve guidance and correct unintended application. Included in this ASU are clarifications for seven issues/areas of improvement. The primary amendments are summarized as the following:

1. Clarification that all entities that elect the fair value option are required to provide the fair value option disclosures in paragraphs 825-10-50-24 through 50-32
2. Clarification in Topic 820 that nonfinancial items accounted for as derivatives can apply the portfolio exception in Topic 820
3. Clarification that the disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions.
4. A cross-reference is added to Line-of-Credit and Revolving-Debt Arrangements Guidance in Subtopic 470-50 which describe fees/costs related to exchanges or modifications of debt instruments
5. A cross-reference is added to subtopic 820-10 to reference the net asset value practical expedient
6. Clarification that the contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit loses under Topic 326
7. Clarification in Subtopic 860-20 that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326

For issues #1, #2, #4, and #5, these amendments are effective immediately for public business entities and for all other entities for fiscal years beginning after December 15, 2019 with early application permitted. For issue #3 the effective date is the same as the effective date for ASU 2019-04, which would apply for fiscal years beginning after December 15, 2019. Issues #6 and #7 amend guidance in ASU 2016-13, which is effective for public business entities that meet the definition of an SEC filer during 2020. All other entities will adopt the amendments to ASU 2016-13 during 2023. Early adoption is still permitted.

The full text of ASU 2020-03 is available here.

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