IASB, GASB address interbank-offered rate phaseout

by | Dec 28, 2019 | Uncategorized | 0 comments

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IASB, GASB address interbank-offered rate phaseout

The impending phaseout of rates such as the London Interbank Offered Rate (LIBOR) will lead preparers to use new benchmarks such as more observable or transactionbased rates, which are seen as less vulnerable to manipulation. LIBOR is expected to cease in its current form in 2021.

In preparation for the change, the International Accounting Standards Board (IASB) amended its new and old financial instruments standards, IFRS 9, Financial Instruments, and IAS 39, Financial Instruments: Recognition and Measurement, as well as IFRS 7, Financial Instruments: Disclosures.

The amendments:

The IASB also has started work on considering the potential consequences on financial reporting of replacing an existing benchmark with an alternative.

The amendments take effect on Jan. 1, 2020, but early application is permitted.

GASB proposal: GASB, meanwhile, proposed new guidance to assist state and local governments in the transition from interbankoffered rates to other reference rates.

The exposure draft, Replacement of Interbank Offered Rates, would:

The removal of LIBOR as an appropriate benchmark interest rate as proposed would be effective for reporting periods beginning after Dec. 15, 2020. All other requirements of this proposed statement would be effective for reporting periods beginning after June 15, 2020. Earlier application would be encouraged.

Comments were to be accepted through Nov. 27 and can be emailed to director@gasb.org.

Research & References of IASB, GASB address interbank-offered rate phaseout|A&C Accounting And Tax Services
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