FASB Issues Update on Meeting of Advisory Council in September 2019
FASB published a summary of the quarterly meeting of the Financial Accounting Standards Advisory Council. The members of the Advisory Council discussed the recent proposed update on facilitation of the effects of reference rate reform on financial reporting (Topic 848). The members provided feedback on three main areas: readiness and transition progress, proposed accounting relief, and potential qualitative and quantitative disclosures.
Overall, the members of the Advisory Council were very supportive of the proposed accounting relief. In terms of readiness, many companies are early in their transition process and have not begun to consider the potential impact and risks that reference rate reform may have on their financial results. The Council members from some industries, such as financial services, and larger companies generally were further along in their assessments and education about the transition when compared to other companies. Some smaller companies anticipated that they would be unaffected, given the rate structures in their contracts. The members of the Advisory Council acknowledged the temporary nature of the relief and supported the commitment of FASB to monitor and consider any future adjustments needed to the sunset provision related to the proposed relief.
Members of the Advisory Council generally disagreed that FASB should add new disclosures related to the reference rate reform. Preparers and practitioners showed concerns about the operationality and costs that could be involved and raised questions about what information could be provided. Some investors and other users indicated that additional disclosures could provide useful information in certain industries or companies where the impact was significant. Yet other investors and certain users indicated that the current Management Discussion and Analysis (MD&A) disclosures related to risks and uncertainties could provide sufficient information about risks related to the transition and additional disclosures may be unnecessary.
Related Links
Keywords: Americas, US, Accounting, Banking, Securities, Reference Rate Reform, Reporting, Disclosures, Interest Rate Benchmarks, Topic 848, FASB
Featured Experts

Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
BCBS Reviews Impact of Stronger Capital and Liquidity RequirementsRelated Articles
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
NGFS Report Explores Quantification of Climate Risk Differentials
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
EC Publishes Results on Review of Web Accessibility Directive
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
MAS Consults on Adjustment Spreads for Conversion of SOR Contracts
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.