FIRST COMMUNITY BANKSHARES INC /VA/ New Standards Disclosure

Recent Accounting Standards

 

Standards Adopted 

 

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740).” The amendments in this ASU are related to the rate reconciliation and income taxes paid disclosures and are designed to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The ASU was effective for annual periods beginning January 1, 2025, and was applied on a prospective basis.  The adoption of this pronouncement did not have a material impact on the Consolidated Financial Statements.

 

Standards Not Yet Adopted

 

In November 2024, the FASB issued ASU No. 2024-03, "Expense Disaggregation Disclosures (Topic 230): Disaggregation of Income Statement Expenses". The amendment requires disclosure of disaggregated information about specific expense categories underlying certain income statement expense line items. This ASU will become effective for the Company on December 31, 2027. 

 

In July 2025, the FASB issued ASU No. 2025-05, "Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets".  This amendment introduces a practical expedient available to all entities that permits an entity to assume that existing economic conditions at the balance sheet date will persist for the remaining life of current accounts receivable and current contract assets, rather than developing a full forward-looking forecast.  This ASU will become effective for the Company in 2026, on a prospective basis.  The adoption of this pronouncement is not expected to have a material impact on the Company's financial statements.

 

In November 2025, the FASB issued ASU No. 2025-08, "Financial Instruments- Credit Losses (Topic 326): Purchased Loans".  The amendment simplifies accounting for acquired loans under the current expected credit losses (CECL) model by expanding use of the gross-up method to a new category of purchased seasonal loans (PSLs).   PSLs are acquired loans purchased more than 90 days after origination or acquired in a business combination.  For PSLs, an allowance for credit loss is to be recorded at acquisition with an equal increase to amortized cost and remove credit loss expense on acquisition date.  The ASU does not apply to credit cards, Topic 606 trade receivables, and debt securities.  The Company expects to early adopt the standard in 2026, and it is not expected to have a material impact on the Company's financial statements.

 

In November 2025, the FASB issued ASU No. 2025-09, "Derivatives and Hedging (Topic 815): Targeted Improvements to Hedge Accounting".  The amendment amends ASC Topic 815 to clarify, improve, and better align hedge accounting guidance with entities' economic risk management strategies and address implementation challenges in practice.  The ASU is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted.   The adoption of this pronouncement is not expected to have a material impact on the Company's financial statements.

 

In December 2025, the FASB issued ASU No. 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements".  The amendment is to enhance the clarity, navigability, and application of interim reporting guidance in ASC Topic 270 without expanding or reducing the fundamental nature of the interim reporting framework.  The amendments clarify when interim guidance applies, the form and content of interim financial statements, and the related disclosure requirements under GAAP.  The ASU is effective for periods beginning after December 15, 2027, with early adoption permitted.  The adoption of this pronouncement is not expected to have a material impact on the Company's financial statements.

 

In December 2025, the FASB issued ASU No. 2025-12, "Codification Improvements".  The amendment consists of technical corrections, clarifications, and narrow-scope improvements that address unintended application issues and improve the clarity and usability of GAAP without making substantive changes to current accounting practice.  The amendments are intended to reduce diversity in practice and correct errors or ambiguous provisions in the Codification.  The ASU is effective for periods beginning after December 15, 2026, with early adoption permitted.  The adoption of this pronouncement is not expected to have a material impact on the Company's financial statements.

 

The Company does not expect other recent accounting standards issued by the FASB or other standards-setting bodies to have a material impact on the consolidated financial statements.