Featured Product

    IASB Adds Phase Two of IBOR Reform to Its Work Plan

    August 15, 2019

    IASB (or the Board) has added the second phase of its project focused on potential financial reporting implications linked to the interest rate benchmark reform—interbank offer rate (IBOR) reform—to its work plan. Phase one of the project focuses on financial reporting issues in the period before the current interest rate benchmark is replaced with an alternative rate, while phase two focuses on potential issues that might affect financial reporting once the existing rate is replaced with an alternative rate.

    As part of the work on the interest rate benchmark reform, the technical staff at IASB has started to analyze the issues to be considered as part of phase two. The Board will start deliberations on these matters during the third quarter of 2019. Under phase one of the interest rate benchmark reform, IASB, in May 2019, had published an Exposure Draft that proposes exceptions to specific hedge accounting requirements in IFRS 9 and IAS 39. The Board met on July 25, 2019 to discuss the staff’s analysis of feedback on the phase one Exposure Draft, which proposes amendments to IFRS 9 and IAS 39. The Board is considering comments received on this Exposure Draft and aims to finalize the amendments as soon as possible.

    Interest rate benchmarks such as IBORs play an important role in global financial markets. These benchmarks index a wide variety of financial products worth trillions of dollars and other currencies, ranging from mortgages to derivatives. Some jurisdictions have already made clear progress toward replacing existing benchmarks with the alternative, nearly risk-free rates. This work has, in turn, led to uncertainty about the future of existing interest rate benchmarks, which may affect financial reporting by companies. In 2018, the Board noted the increasing level of uncertainty about the long-term viability of some interest rate benchmarks and decided to add a project to its agenda to consider the financial reporting implications of the reform. In its outreach with stakeholders, the Board has identified two groups of accounting issues that could have financial reporting implications. These are:

    • Pre-replacement issues (addressed in phase one)—These are issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative risk-free rate.
    • Replacement issues (addressed in phase two)—These are issues that might affect financial reporting when an existing interest rate benchmark is replaced with an alternative risk-free rate. 

    Keywords: International, Accounting, Banking, Securities, IBOR, Interest Rate Benchmark, Reporting, IFRS 9, IASB

    Featured Experts
    Related Articles
    News

    EU Amends IFRS 9 Rule, Changes Concern Interest Rate Benchmark Reforms

    EU published Regulation 2020/34 regarding the International Accounting Standard (IAS) 39 and International Financial Reporting Standards (IFRS) 7 and 9.

    January 16, 2020 WebPage Regulatory News
    News

    FDIC and OCC Issue Statement on Heightened Cyber Security Risk

    In response to the heightened cyber-security risk facing the financial services industry and other critical business sectors, FDIC and OCC issued an interagency statement on heightened cyber-security risk.

    January 16, 2020 WebPage Regulatory News
    News

    BCRA Updates Regulation on Capital Requirements and Information Regime

    BCRA updated the rules on minimum capital requirements for financial entities and on certain aspects of the information transparency regime for quarterly and annual supervision.

    January 16, 2020 WebPage Regulatory News
    News

    BoE and FCA Outline Next Steps for LIBOR Transition in 2020

    BoE, FCA, and the Working Group on Sterling Risk-Free Reference Rates (RFRWG) have published a set of documents that outline the LIBOR transition priorities and milestones for 2020.

    January 16, 2020 WebPage Regulatory News
    News

    BIS to Expand Central Bank Membership

    BIS is to expand its central bank membership base and to increase collaboration in its work as a forum for international cooperation and as a hub for central banks and other financial authorities.

    January 14, 2020 WebPage Regulatory News
    News

    EIOPA Issues Technical Specifications for Market and Credit Risk Study

    EIOPA published the technical specifications, including instructions, for the market and credit risk modeling comparative study for year-end 2019.

    January 13, 2020 WebPage Regulatory News
    News

    FED Publishes FAQs on Tailoring Rules for Banks

    FED released a letter announcing the publication of an initial set of frequently asked questions (FAQs) in response to questions from institutions.

    January 13, 2020 WebPage Regulatory News
    News

    IA of Hong Kong Publishes Stress Testing Scenarios in Relation to ORSA

    IA of Hong Kong published the prescribed scenarios for stress and scenario testing to be used by the authorized insurers conducting general insurance business.

    January 13, 2020 WebPage Regulatory News
    News

    ISDA Paper Examines Legal Aspects of Smart Contracts Using Blockchain

    ISDA published a paper that discusses legal aspects of smart derivatives contracts that use the distributed ledger technology (DLT), which is also commonly known as the blockchain technology.

    January 13, 2020 WebPage Regulatory News
    News

    FDIC Letter on Submission of Call Reports by End of January 2020

    FDIC, in a letter to financial institutions, announced that the Consolidated Reports of Condition and Income (Call Reports) for the December 31, 2019 report date must be submitted to the Central Data Repository of the relevant US agencies by January 30, 2020.

    January 13, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4495