FASB issued guidance Thursday, Jan. 7, to clarify which derivatives are eligible for certain optional expedients and exceptions under the board’s new standard that creates accounting relief for reference rate reforms.
According to FASB, the discounting transition affects derivative instruments indexed to a wide variety of reference rates, including rates that will not be discontinued as a result of reference rate reform.
In the new standard, FASB clarified the scope of Topic 848 to explain that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. Learn more.