FASB Issues Proposal to Facilitate the Effects of Reference Rate Reform on Financial Reporting
On Sept. 5, the Financial Accounting Standards Board (FASB) issued a proposal (the Proposal) that would provide temporary optional transition relief for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The Proposal would apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. If you are interested in participating in a task force that will evaluate the Proposal and consider whether Nareit should develop a comment letter, please contact Christopher Drula (firstname.lastname@example.org) by Sept. 18. Comment letters are due to the FASB by Oct. 7.
The Proposal would be effective for all entities upon the issuance of a final Accounting Standards Update. Upon adoption, an entity may elect to apply the proposed amendments prospectively to contract modifications made and to hedging relationships existing as of or entered into on or after the date of adoption and through Dec. 31, 2022. The proposed amendments would not apply to contract modifications made and hedging relationships entered into or evaluated after Dec. 31, 2022.