Featured Product

    FASB Issues Tentative Board Decisions Related to Reference Rate Reform

    June 19, 2019

    FASB published a summary of the tentative decisions taken at its Board meeting on June 19, 2019. The key topics for tentative decisions were facilitation of the effects of the interbank offered rate (IBOR) transition on financial reporting and distinguishing liabilities from equity (including convertible debt). FASB took a major step toward approving accounting relief for companies and organizations that are required to modify contracts as a result of the new global reference rates.

    The Board tentatively decided that, for a contract that meets certain criteria, a change in that contract’s reference interest rate would be accounted for as a continuation of that contract, rather than the creation of a new contract. This decision applies to loans, debt, leases, and other arrangements. Currently, trillions of dollars in loans, derivatives, and other financial contracts reference the London Interbank Offered Rate (LIBOR), the benchmark interest rate banks use to make short-terms loans to each other. Consequently, the related cash flows are tied to that rate. With global capital markets expected to move away from LIBOR toward more transaction-based reference rates, FASB has launched a broad project to address the potential accounting concerns expected to arise from the transition. FASB will discuss other hedging-specific reference rate issues at a public meeting in July. 

    With respect to distinguishing liabilities from equity (including convertible debt), the Board discussed the results of the external review of the staff draft of the proposed update, sweep issues, comment period, and cost-benefit analysis. The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot, with a comment period of 75 days. 

     

    Related Links

    Keywords: Americas, US, Banking, Accounting, Securities, Tentative Decisions, Accounting Standards Update, Reference Rate Reform, LIBOR, Interest Rate Benchmark, Reporting, Derivatives and Hedging, FASB

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    FASB Proposes Improvements to 2023 GAAP Reporting Taxonomy

    The Financial Accounting Standards Board (FASB) is seeking comments, until November 03, 2022, on the proposed technical and other conforming improvements for the 2023 GAAP Financial Reporting Taxonomy.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8588