The Financial Accounting Standards Board has issued Accounting Standards Update No. 2020-04 to provide optional guidance for accounting for the transition away from the expiring London Interbank Offered Rate (LIBOR) and other reference rates to new benchmark rates. The ASU, which is temporary and only in effect during the reference rate transition period through Dec. 31, 2022, is intended to reduce the costs and complexities of accounting for reference rate reform.
“This new ASU addresses operational challenges stakeholders raised with the Board and will help simplify matters going forward,” said FASB Chairman Russ Golden. “At the same time, the new guidance will also help reduce transition-related costs.”
