At its meeting on June 16-17, 2021, the AcSB discussed proposals to include in an Exposure Draft to amend Section 3856, Financial Instruments, to address issues related to debt modification and hedge accounting resulting from IBOR reform.

The Board decided that the amendments will:

• provide optional relief for debt modifications directly related to IBOR reform, allowing entities to account for these modifications as a continuation of the existing contract rather than an extinguishment; and
• allow entities to update their hedge documentation to reflect changes resulting from IBOR reform without discontinuing hedge accounting.

The AcSB expects to issue the Exposure Draft in September 2021. The Board plans to incorporate the amendments into Part II of the Handbook in the first quarter of 2022 to make the relief available when entities prepare their 2021 year-end financial statements.

Review the Executive Summary on the AcSB's Web site.