FASB Meeting Decisions
In its October meeting, the FASB voted to defer the sunset date of Topic 848 to December 31, 2024 and to remove the Reference Rate Reform - FV Hedge project from its technical agenda.
Topic 848 was designed to provide relief while companies are exposed to reference rate reform. It is specifically for "derivative instruments that do not reference a rate expected to be discontinued but that have an interest rate for margining, discounting, or contract price alignment that is modified because of reference rate reform." Extending the sunset date for this relief gives clients 2 more years to make any necessary changes.
The original objective of the rate reform/fair value hedging project was to develop a principle for identifying interest rates eligible for fair value hedge accounting both within and outside the US. After further research, the Board has removed the project from its technical agenda.
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About Principia Partners
Principia Partners LLC provides solutions for derivative and fixed income operations. Global financial institutions and independent asset managers have used the award-winning Principia Analytic System since 1995 to unify valuations, portfolio management, risk surveillance, hedge accounting and operational control across the breadth of fixed income and derivative products. In 2015, Principia launched its Analytic Service, pasVal, to make its award-winning pricing and analytics available to an even broader range of businesses.