The Financial Accounting Standards Board recently issued Accounting Standards Update (ASU) 2020-03 to improve and clarify various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. ASU 2020-03 was issued separately from FASB’s other Codification improvement projects to address specific areas brought to the board’s attention by stakeholders.

Maria L. Murphy, CPA, is a regular contributor to Compliance Week. She is a senior content management analyst, accounting and auditing products, CCH tax and accounting North America for Wolters Kluwer....