Consolidated Report of Condition and Income (Call Report) for a Bank with Domestic and Foreign Offices - FFIEC 031

Appendix C: Revisions to Call Report Instructions to Align with Final FASB Standard

Schedule RC-B, Item 7:
Unallocated last-of-portfolio layer fair value hedge basis adjustments. Report the
total amount of last-of-portfolio layer fair value hedge basis adjustments (FVHBA) not
allocated to individual AFS debt securities in column C only.

AF
T

As defined in Accounting Standards Update No. 2017-122022-01, Derivatives and
Hedging (Topic 815), “Targeted Improvements to Accounting for Fair Value Hedging
Activities- Portfolio Layer Method” (ASU 2017-022022-01), the last-of-portfolio layer
method was added to allow entities to apply hedge accounting to a single closed
portfolio of prepayable fixed-rate financial assets or one or more beneficial interests
secured by a portfolio of prepayable financial instruments. that is not expected to be
affected by prepayments, defaults, or other factors affecting the timing and amount of
cash flows for the designated hedge period. Under ASU 2017-122022-01, different
types of qualifying assets can be grouped together in a last-of-portfolio layer hedge.
Due to the aggregation of assets in a last-of-layer closed portfolio, institutions may find it
challenging to allocate the last-of-layer FVHBAs toPer the standard, an institution should
not adjust the recorded investment or the discount rate of the individual AFS debt
security level.assets or individual beneficial interest included in the single, closed
portfolio for a basis adjustment that is maintained on a closed portfolio basis. As such,
an institution that applies the last-of-portfolio layer method to a closed portfolio of AFS
debt securities isshould not required to allocate the portfolio-level, last-of- layer FVHBAs
to a more granular level and. Institutions should report these unallocated amounts in
this item 7, column C.

D

R

If the amount to be reported in this item represents a reduction in the amounts reported
in Schedule RC-B, items 1 through 6.b, column C, report the amount with a minus (-)
sign.

Appendix C (Continued)
Schedule RC-C, item 11
LESS: Any unearned income on loans reflected in items 1-9 above. To the extent
possible, the preferred treatment is to report the specific loan categories net of both unearned
income and net unamortized loan fees. A reporting bank should enter (on the FFIEC 041, in
column B; on the FFIEC 031, in columns A and B, as appropriate) unearned income and net
unamortized loan fees only to the extent that these amounts are included in (i.e., not
deducted from) the various loan items of this schedule (Schedule RC-C, part I, items 1
through 9).

AF
T

As defined in Accounting Standards Update No. 2017-122022-01, Derivatives and Hedging
(Topic 815), “Targeted Improvements to Accounting for Hedging Activities Fair Value Hedging Portfolio Layer Method” (ASU 2017-122022-01), the last-of-portfolio layer method was added to
allow entities to apply hedge accounting to a single closed portfolio of prepayable fixed-rate
financial assets or one or more beneficial interests secured by a portfolio of prepayable financial
instruments. that is not expected to be affected by prepayments, defaults, or other factors
affecting the timing and amount of cash flows for the designated hedge period. Under ASU
2017-122022-01, different types of qualifying assets can be grouped together in a last-ofportfolio layer hedge.

R

Due to the aggregation of assets in a last-of-layer closed portfolio, institutions may find it
challenging to allocate the last-of-layer fair value hedge basis adjustments (FVHBAs) toPer the
standard, an institution should not adjust the recorded investment or the discount rate of the
individual loan level.assets or individual beneficial interest included in the closed portfolio for a
basis adjustment that is maintained on the closed portfolio basis. As such, an institution that
applies the last-of-layerportfolio method to a closed portfolio of loans isshould not required to
allocate the portfolio-level, last-of- layer fair value hedge basis adjustments (FVHBAs) to a more
granular level and should include these unallocated amounts in this item 11.

D

If an institution reports each loan item in this schedule net of both unearned income and net
unamortized loan fees and has no unallocated last-of-portfolio layer FVHBAs applicable to
loans, enter a zero in this item. If the amount to be reported in this item represents an addition
to the amounts reported in Schedule RC-C, Part I, items 1 through 10, because of unallocated
last-of-portfolio layer FVHBAs, report the amount with a minus (-) sign.