The IMA® (Institute of Management Accountants) Financial Reporting Committee (FRC or Committee) issued a comment letter in response to the Financial Accounting Standards Board (FASB) Proposed Accounting Standards Update (ASU) No. 2022-001, Reference Rate Reform (Topic 848) and Derivatives and Hedging (Topic 815): Deferral of the Sunset Date of Topic 848 and Amendments to the Definition of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate (Proposal).
The Proposal, if adopted, would defer the sunset date of the transition guidance in Topic 848, Reference Rate Reform. The FASB issued the Proposal to provide temporary relief as stakeholders continue to address the accounting for market-wide transition from interbank offered rates, such as LIBOR, as the reference rate in financial contracts and instruments.
The FRC supports Proposed ASU No. 2022-001, including its proposed definitional changes. The Committee further encourages the FASB to continue its monitoring of market developments regarding reference rate reform.
