TWO HARBORS INVESTMENT CORP.TWO
TWO HARBORS INVESTMENT CORP. New Standards Disclosure
Recently Issued and/or Adopted Accounting Standards
Hedge Accounting Improvements
In November 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-09, which more closely aligns hedge accounting with the economics of an entity’s risk management activities by addressing five key hedging issues. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2026, with early adoption permitted. The guidance should be applied prospectively. The Company has determined this ASU will not have an impact on the Company’s financial condition, results of operations or financial statement disclosures.
Accounting for Certain Purchased Loans
In November 2025, the FASB issued ASU No. 2025-08, which expands the population of acquired financial assets subject to the gross-up approach in ASC 326, Financial Instruments—Credit Losses, to include loans acquired without credit deterioration and deemed “seasoned,” as defined in the update. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2026, with early adoption permitted. The guidance should be applied prospectively. The Company has determined this ASU will not have an impact on the Company’s financial condition, results of operations or financial statement disclosures.
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU No. 2025-06, which removes all references to prescriptive and sequential software development stages throughout ASC 350-40, Internal-Use Software. Under the guidance, an entity is required to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2027. Early adoption is permitted as of the beginning of the annual reporting period. The guidance may be applied using either a prospective transition approach, a modified transition approach or a retrospective transition approach. The Company has determined this ASU will not have a material impact on the Company’s financial condition, results of operations or financial statement disclosures.
Issuer’s Accounting for Induced Conversions of Convertible Debt Instruments
In November 2024, the FASB issued ASU No. 2024-04, which clarifies the requirements for determining whether certain early settlements of convertible debt instruments should be accounted for as an induced conversion or a debt extinguishment. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 31, 2025, with early adoption permitted for entities that have adopted ASU No. 2020-06. The Company has determined this ASU will not have an impact on the Company’s financial condition, results of operations or financial statement disclosures.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU No. 2024-03, which requires public entities to disclose specific expense categories, including employee compensation, depreciation, and intangible asset amortization expenses, in the notes to financial statements on both an annual and interim basis. The guidance also requires a qualitative description of amounts that are not disaggregated quantitatively. The ASU is effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The guidance should be applied either prospectively or retrospectively for each period presented. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU No. 2023-09, which requires entities to provide additional information about federal, state and foreign income taxes and reconciling items in the rate reconciliation table, and to disclose further disaggregation of income taxes paid (net of refunds received) by federal (national), state and foreign taxes by jurisdiction. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. The Company has adopted this ASU, which did not have a material impact on the Company’s financial condition, results of operations or financial statement disclosures. See Note 18 - Income Taxes of these notes to the consolidated financial statements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 26, 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.