PROJECT UPDATE

Reference Rate Reform—Deferral of the Sunset Date of Topic 848

Last updated on November 2, 2022. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Sections updated on the date above are indicated with an asterisk *)

 

Objective:

The objective of this project is to defer the sunset date of Topic 848, Reference Rate Reform.
 

Background:


Sunset Date

The relief in Topic 848 is effective through December 31, 2022. In December 2020, the ICE Benchmark Administration (IBA) published a consultation, the ICE LIBOR® Consultation on Potential Cessation, seeking feedback on its intention to defer the cessation date of certain tenors of USD LIBOR to June 30, 2023. On March 5, 2021, LIBOR’s regulator announced that certain tenors of USD LIBOR will continue to be published until June 30, 2023. This project was added to the technical agenda to evaluate whether the relief in Topic 848 should be extended.

Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate

The SOFR swap rate was introduced as a Master Glossary term in Accounting Standards Update No. 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 current definition is limited to the OIS rate based on SOFR.

The Board considered amending the definition of the SOFR OIS rate to include the SOFR term rate, but decided not to expand the list of benchmark interest rates at this time. Therefore, the amendment to the definition of the SOFR OIS rate is no longer included in the scope or objective of this project.

Exposure Draft(s):

On April 20, 2022, the Board issued proposed Accounting Standards Update, Reference Rate Reform (Topic 848) and Derivatives and Hedging (Topic 815): Deferral of the Sunset Date of Topic 848 and Amendments to the Definition of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate. The due date for comment letters was June 6, 2022.
  • Download the proposed Accounting Standards Update

Comment Letters:

Read comment letters on the proposed Accounting Standards Update.

There are no media releases or educational materials at this time.

Decisions Reached at Last Meetings (October 5, 2022):


The Board redeliberated the proposed Accounting Standards Update, Reference Rate Reform (Topic 848) and Derivatives and Hedging (Topic 815): Deferral of the Sunset Date of Topic 848 and Amendments to the Definition of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate.

The Board affirmed the following decisions:

  1. To amend the sunset date of the guidance in Topic 848 to December 31, 2024.
  2. That the amendments in the final Update should be effective immediately for all entities upon issuance and applied prospectively.
The Board decided not to amend the definition of SOFR OIS Rate.

Tentative Board Decisions Reached to Date (as of October 5, 2022)


A summary of the Board’s tentative decisions reached to date can be found here.

The Board meeting minutes, handouts, and videos are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

The following are links to the minutes for each meeting.  To view Board meetings and handouts from the past 90 days, click here.
 
October 5, 2022* Board Meeting—The Board affirmed the decision to defer the sunset date of Topic 848 to December 31, 2024, and decided not to amend the definition of the SOFR OIS Rate. The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.
March 16, 2022 Board Meeting—The Board modified the scope of the project to include an amendment to the definition of the SOFR Swap Rate and directed the staff to continue drafting a proposed Accounting Standards Update.
December 15, 2021 Board Meeting—The Board added the project to the technical agenda and directed the staff to draft an Accounting Standards Update.

The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.

Kenjiro Matsuo
Project Manager
kmatsuo@fasb.org

Chase Hodges
Practice Fellow
chodges@fasb.org

Rosemarie Sangiuolo
Senior Project Advisor
rsangiuolo@fasb.org

Matthew Shea
Postgraduate Technical Assistant
mshea@fasb.org

Lindsey Hoyer
Postgraduate Technical Assistant
lhoyer@fasb.org

The staff has prepared this summary for information purposes only. Any Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
 

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