FASB Issues Proposal to Clarify Scope of Reference Rate Reform Guidance
Tax & AccountingDecember 21, 2022

FASB defers sunset date of reference rate reform guidance

By: CCH ARM Editorial

The FASB today issued Accounting Standards Update 2022-06—Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848), that extends the period of time preparers can utilize the reference rate reform relief guidance. The amendments in ASU No. 2022-06 are effective for all entities upon issuance.

In 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. In 2021, the UK Financial Conduct Authority (FCA) delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023.

To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.

Keep Reading on CCH® Accounting Research Manager.
Not a subscriber? Sign up for a Free Trial

CCH ARM Editorial

Comprised of trusted industry experts, the Wolters Kluwer CCH ARM Editorial Staff are knowledgeable and highly qualified to analyze and offer guidance on the latest, important accounting and audit topics. They ensure every topic is thoroughly researched and meticulously broken down to provide up to date and accurate information. Read more of their insights on CCH Accounting Research Manager.

Research & Learning

CCH® Accounting Research Manager® delivers interpretive guidance and authoritative content needed to confidently make accounting, financial reporting and audit decisions.


Back To Top