FASB Proposes Guidance Related to Effects of Reference Rate Reform
September 5, 2019
The FASB has issued a proposed Accounting Standards Update (ASU), Facilitation of the Effects of Reference Rate Reform on Financial Reporting.
The proposed ASU would provide temporary, optional expedients and exceptions related to applying U.S. GAAP to contract modifications, hedging relationships, fair value hedges, and other transactions affected by reference rate reform. The purpose of the proposal is to “ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting.” However, the proposed amendments would “apply only to contracts or hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.”
Comments on the proposed ASU are due by October 7, 2019. For more information, see the press release and FASB in Focus newsletter on the FASB’s Web site.