Interest Rate Benchmark (IBOR) Reform [Completed]
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Effective date: |
The final amendments were issued to the CPA Canada Handbook on February 1, 2022. The amendments will apply to annual financial statements ending on or after February 1, 2022, with earlier application permitted, including in financial statements not yet authorized for issue. |
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Last updated: |
February 2022 |
Overview
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 issued the Exposure Draft in September 2021.
The Board issued the final amendments to Section 3856, Financial Instruments, in Part II of the Handbook on February 1, 2022 in order to make the relief available when entities prepare their 2021 year-end financial statements.
Other developments
February 2022
The final amendments to Section 3856 were issued to the CPA Canada Handbook on February 1, 2022. The amendments will apply to annual financial statements ending on or after February 1, 2022, with earlier application permitted, including in financial statements not yet authorized for issue.
September 2021
On September 13, 2021, the Accounting Standards Board (AcSB) released an exposure draft Financial Instruments. The proposal provides an optional expedient for applying modification accounting and an exception to certain hedge accounting requirements in Section 3856, Financial Instruments. Applying to both private enterprises and NFPOs using Parts II and III of the CPA Canada Handbook – Accounting, these amendments aim to ease financial reporting burdens related to market-wide interest rate benchmark reform. Comments are requested by October 17, 2021.