The IASB made more progress in phase two of its project to amend IFRS in response to the financial reporting challenges posed by IBOR reform.
On 11 December 2019, the International Accounting Standards Board (the IASB) made significant further progress in its project to address the financial reporting issues associated with IBOR reform. In this publication, we summarize the tentative decisions taken and provide our view of how we see it.
Following the decision taken by global regulators to replace Interbank Offered Rates (IBORs) with replacement benchmark interest rates or risk-free rates (RFRs), in 2018, the IASB commenced work to address the effects of IBOR reform on financial reporting. The IASB divided its work into two phases:
- Phase one addressed issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative nearly risk-free interest rate.
- Phase two is focused on issues that affect financial reporting when an existing interest rate benchmark is replaced with an RFR.