FASB Proposes Scope Amendments to Reference Rate Reform Guidance

The FASB has issued a proposed Accounting Standards Update (ASU), Reference Rate Reform (Topic 848): Scope Refinement, to address stakeholder concerns related to the accounting for “changes in the interest rate used for margining, discounting, or contract price alignment for a derivative instrument that are being implemented as part of the market-wide transition to new reference rates (commonly referred to as the ‘discounting transition’).” The proposed ASU would “clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to contracts that are affected by the discounting transition.”

For more information, see the press release on the FASB’s Web site.