A two-pronged proposal by FASB would extend the time financial statement preparers can use the reference rate reform relief guidance and expand the secured overnight financing rate-based (SOFR-based) interest rates available as benchmark interest rates.
The first issue in the proposal relates to a deferral of the proposed sunset date by two years of the March 2020 Accounting Standards Update, designed to provide relief to financial statement preparers as they made the transition away from discontinuing rates.
The second issue relates to the definition of the SOFR overnight index swap rate. The proposal would amend the definition of the SOFR swap rate to include other versions of SOFR.
FASB seeks feedback on the proposed update by June 6. Learn more.