Background

In July 2019, the Financial Reporting Council (FRC) published FRED 72 Draft amendments to FRS 102 – Interest rate benchmark reform.

The exposure draft proposes narrow scope amendments to specific hedge accounting requirements in Section 12 of FRS 102 to provide relief that will avoid unnecessary discontinuation of hedge accounting as interest rate benchmarks are reformed.  Entities will apply those hedge accounting requirements assuming that the interest rate benchmark relevant to the hedge accounting is not altered as a result of interest rate benchmark reform.

FRED 72 is based on similar proposals issued by the IASB, and has a proposed effective date of 1 January 2020, with early application permitted.  

Current status of the project

In December 2019 the FRC issued 'Amendments to FRS 102 – Interest rate benchmark reform'.  The amendments are effective for accounting periods beginning on or after 1 January 2020, with early application permitted.