NORWALK, Conn.–To help ease some of the burden in the move away from LIBOR, the Financial Accounting Standards Board (FASB) has released new guidance designed to “ease the process of” migrating away from reference rates that include LIBOR as well as a migration to new reference rates.
According to FASB, the guidance addresses operational challenges and is designed to “simplify matters going forward and help reduce transition-related costs.”
The update will also help reduce transition-related costs, FASB said.
The guidance will be in effect through Dec. 31, 2022, FASB said, to help various parties during the reference-rate transition period.
FASB said the new guidance provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.
The guidance can be found here.