FASB to Vote on Hedge Accounting for US LIBOR Successor

December 8, 2017

 

FASB to vote on hedge accounting for US LIBOR successor
By Robert Mackenzie Smith

Dan Gentzel, senior accounting adviser at consultancy Chatham Financial, says: “If the FASB doesn’t include an amendment to allow a change from LIBOR to SOFR as not a [material] change in the terms of a swap, then companies are going to have to take a look at all their hedging relationships with LIBOR swaps and possibly have to re-designate them once that rate changes.” Re-designation, or documenting the newly transitioned trades as hedges for specific instruments, could be burdensome for firms.

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