58ASC 848 REFERENCE RATE REFORM
TECHNICAL ALERT
Proposal In April 2022, the FASB proposed
- Extending the time entities can use reference rate reform relief guidance explained below and
- Expanding the Secured Overnight Financing Rate-based interest rates available as benchmark interest rates.
Regarding issue number 1, ASU 2020-04 gives relief to entities as they transition away from LIBOR and other discontinued rates. However LIBOR's phaseout was delayed from 2021 to June 30, 2023. Thus, the proposal defers the sunset date of ASC 848 from Dec. 31, 2022, to Dec. 31, 2024.
To address issue number 2, because of developments of SOFR term in the marketplace, the proposal amends the definition of the SOFR Swap Rate to include other versions of SOFR, such as SOFR term as a benchmark interest rate under ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.
The proposal would also ...
Get Wiley GAAP 2023 now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.