Next Steps for FASB Exposure Draft on Hedging

The FASB reaffirmed many of the decisions made in the original exposure draft issued September 8, 2016.

However, they will continue to discuss the following issues raised by constituents in the two meetings detailed below.

At the next meeting on February 15th, the FASB will be re-deliberating the following two items:

Prohibition of returning to qualitative testing after a quantitative test is necessary.

Documentation requirements for private companies.

On March 8th, the FASB will be meeting to re-deliberate the following:

The market yield test for FV hedges when the benchmark rate is below the coupon rate

The measurement model for excluded components

FX basis and whether it should be included as an excluded component

FV portfolio hedges

All re-deliberations are scheduled to be completed by March 8th and the FASB is expecting to make a final vote in April or May.

Introducing the Portfolio Method: The FASB Expands Fair Value Hedge Accounting

On March 28, the Financial Accounting Standards Board (FASB) issued ASU 2022-01 to improve and expand fair value hedge accounting. Here’s what this update means for corporates and other organizations using the last-of-layer strategy.
LIBOR Transition: Understanding FASB’s Latest Reference Rate Reform Guidance

In March, the FASB issued ASU 2020-04 on the “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.”
LIBOR Transition: The Latest Interest Rate Reform Details

As LIBOR is phased out, reference rate reform will identify new and alternative reference index rates for financial instruments, including the Secured Overnight Financing Rate (SOFR).

The FASB reaffirmed many of the decisions made in the original exposure draft issued September 8, 2016.