Morgan Stanley 2015 Annual Report Download - page 76

Accounting Development Updates.
Thus far in 2016, the Financial Accounting Standards Board (the “FASB”) issued the following accounting update, which
applies to the Company:
• Recognition and Measurement of Financial Assets and Financial Liabilities. The guidance is effective for the
Company beginning January 1, 2018. Early adoption is permitted for a specific component in the accounting
standard, in which the Company would present separately in other comprehensive income the portion of the total
change in the fair value of a liability resulting from a change in the instrument-specific credit risk if the Company
has elected to measure the liability at fair value in accordance with the fair value option for financial instruments
(i.e., DVA). This accounting update is currently being evaluated to determine the potential impact of adoption.
During 2015 and 2014, the FASB issued the following accounting updates, which apply to the Company, but they are not
expected to have a material impact on the consolidated financial statements:
• Simplifying the Accounting for Measurement-Period Adjustments.
• Simplifying the Presentation of Debt Issuance Costs.
• Amendments to the Consolidation Analysis.
• Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More
Akin to Debt or to Equity.
• Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.
• Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity.
• Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be
Achieved after the Requisite Service Period.
During 2014, the FASB also issued the following accounting update:
• Revenue from Contracts with Customers. In May 2014, the FASB issued an accounting update to clarify the
principles of revenue recognition, to develop a common revenue recognition standard across all industries for U.S.
GAAP and International Financial Reporting Standards and to provide enhanced disclosures for users of the
financial statements. The core principle of this guidance is that an entity should recognize revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. On April 1, 2015, the FASB voted to propose a
deferral of the effective date of this accounting update by one year to January 1, 2018. Additionally, the FASB
permits an entity to adopt this accounting update early but not before the original effective date, beginning
January 1, 2017. This accounting update is currently being evaluated to determine the potential impact of adoption.
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