v3.26.1
Basis of Condensed Consolidated Financial Statements (Policies)
6 Months Ended
Jun. 30, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

Basis of Presentation

The condensed consolidated financial information included in this report has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Securities and Exchange Commission Regulation S-X. The principles for condensed interim financial information do not require the inclusion of all the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the First American Financial Corporation (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2025. The condensed consolidated financial statements included herein are unaudited; however, in the opinion of management, they contain all normal recurring adjustments necessary for a fair statement of the consolidated results for the interim periods. All material intercompany transactions and balances have been eliminated upon consolidation.

Pending Accounting Pronouncements

Pending Accounting Pronouncements

In September 2025, the FASB issued updated guidance intended to modernize the accounting for internal-use software costs. The updated guidance better aligns the accounting with how software is currently developed by making the guidance more relevant for agile and iterative development methods. Under the updated guidance, an entity is required to begin capitalizing software costs when management has authorized and committed to funding a software project and it is probable that the project will be completed and the software will be used to perform the function intended. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2027, with early adoption permitted, and can be applied prospectively, retrospectively, or through a modified prospective method in the Company's financial statements. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements.

In November 2024, the FASB issued updated guidance intended to improve financial reporting by requiring entities to disclose additional information in the notes to the financial statements about specific expense categories within the income statement. The updated guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The updated disclosures can be applied either prospectively or retrospectively in the Company's financial statements. Except for the disclosure requirements, the Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements.