EDUCATIONAL RESOURCES

ASU 2020-04 ASU 2021-01 Post-Issuance Summary	FASB In Focus (March 12, 2020) Press Release (March 12, 2020) Media Advisory (January 7, 2021)
Educational Video - Promoting a Smooth Transition (March 2020)

SUMMARY

The FASB issued Update 2020-04 to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform.

The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued.

The new guidance provides the following optional expedients:

1. Simplify accounting analyses under current GAAP for contract modifications.
2. Simplify the assessment of hedge effectiveness and allow hedging relationships affected by reference rate reform to continue.
3. Allow a one-time election to sell or transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform.

An entity may elect to apply the amendments prospectively through December 31, 2022.
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