FIRST MERCHANTS CORPFRME
FIRST MERCHANTS CORP New Standards Disclosure
RECENT ACCOUNTING CHANGES ADOPTED IN 2025
FASB Accounting Standards Update No. 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures
Summary - In the fourth quarter of 2025, the Corporation adopted ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU enhances existing income tax disclosure requirements by requiring more detailed information about the effective tax rate reconciliation and income taxes paid.
The amendments require enhanced disclosure of significant reconciling items in the effective tax rate reconciliation, including disclosure of specific categories within the rate reconciliation when quantitative thresholds are met. In addition, entities are required to disclose income taxes paid (net of refunds received), disaggregated by federal, state, and foreign jurisdictions, as well as by individual jurisdictions that are significant to the entity.
The amendments are effective for annual periods beginning after December 15, 2024. The Corporation adopted the amendments for the year ended December 31, 2025. The guidance may be applied on a prospective basis; retrospective application is also permitted. The adoption did not have a material effect on the Corporation’s financial statements or related disclosures. See NOTE 19. INCOME TAXES of the Notes to Consolidated Financial Statements for additional information.
NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
The Corporation continually monitors potential accounting pronouncements and the following pronouncements have been deemed to have the most applicability to the Corporation's financial statements:
FASB Accounting Standards Update No. 2024-03 - Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures
Summary - The FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures in the fourth quarter of 2024. This ASU requires public business entities to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods.
The objective of the disclosure requirements is to provide disaggregated information about a public business entity's expenses to help investors (a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over time and with that of other entities.
The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Corporation is assessing the terms of this guidance, but adoption of the standard is not expected to have a significant impact on the Corporation’s financial statements or disclosures.
FASB Accounting Standards Update No. 2025-08 - Financial Instruments - Credit Losses (Topic 326): Purchased Loans
Summary - The FASB issued ASU No. 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans in the fourth quarter of 2025. This ASU requires that purchased seasoned loans be accounted for using the gross-up approach, which will enhance comparability and consistency in the accounting for acquired financial assets.
The amendments in this Update expand the population of acquired financial assets accounted for under the gross‑up approach by requiring that purchased seasoned loans—defined as loans (excluding credit cards) acquired without credit deterioration and deemed ‘seasoned’—be recognized using the gross‑up methodology at acquisition. Entities must first determine that a loan is a non‑PCD asset and then assess whether it meets the definition of a purchased seasoned loan to apply the gross‑up approach.
The amendments are effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, and are to be applied prospectively to loans acquired on or after the adoption date. Early adoption is permitted for any interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Corporation plans to early adopt this guidance in connection with the acquisition of First Savings Financial Group, Inc. (“First Savings”) in the first quarter of 2026, at which time the gross-up approach will be applied to loans acquired in the transaction, along with required quantitative disclosures of activity in the allowance for credit losses for purchased seasoned loans.
FASB Accounting Standards Update No. 2025-09 - Derivatives and Hedging (Topic 815): Hedge Accounting Improvements
Summary - The FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): hedge Accounting Improvements in the fourth quarter 2025. The amendments in this Update clarify certain aspects of the guidance on hedge accounting and to address several incremental hedge accounting issues from the global reference rate reform initiative.
The objective is to more closely align hedge accounting with the economics of an entity’s risk management activities. The five issues addressed in this Update are intended to better reflect those strategies in financial reporting by enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions.
The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those fiscal years. Early adoption is permitted. The Corporation is assessing the terms of this guidance, but adoption of the standard is not expected to have a significant impact on the Corporation’s financial statements or disclosures.
FASB Accounting Standards Update No. 2025-10 - Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities
Summary - The FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities in the fourth quarter 2025. This Update establishes authoritative U.S. GAAP guidance for accounting for government grants received by business entities, including recognition, measurement, and presentation. It provides specific guidance for grants related to assets and grants related to income. The amendments exclude income taxes, below-market interest rate loans, and government guarantees.
The amendments are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those fiscal years. Early adoption is permitted for any interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Corporation is assessing the terms of this guidance, but adoption of the standard is not expected to have a significant impact on the Corporation’s financial statements or disclosures.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About New Standards Disclosures
New accounting standards disclosures describe recently adopted pronouncements and those not yet effective, along with management's assessment of their expected impact. This section provides an early warning system for upcoming changes to how a company reports its financial results, often years before the new rules take effect.
Key signals: when management describes a not-yet-adopted standard's impact as "material" or "still being evaluated," it signals potential significant changes to reported metrics upon adoption. Watch for standards that affect a company's core operations — for example, revenue recognition changes for software companies or lease accounting changes for retailers with large store footprints. The transition method chosen (full retrospective versus modified retrospective) affects comparability with prior periods. Companies that delay adoption to the latest permitted date may be struggling with implementation complexity. Compare the disclosed impact assessments against peers in the same industry to gauge whether management's expectations are reasonable.