FASB to vote on hedge accounting for US Libor successor
By Robert Mackenzie Smith
December 7, 2017

Dan Gentzel, senior accounting adviser at consultancy Chatham Financial, says: “If the FASB doesn’t include an amendment to allow a change from Libor to SOFR as not a [material] change in the terms of a swap, then companies are going to have to take a look at all their hedging relationships with Libor swaps and possibly have to re-designate them once that rate changes.” Re-designation, or documenting the newly transitioned trades as hedges for specific instruments, could be burdensome for firms.

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