Defining Issues | September 2019

FASB proposes relief related to reference rate reform

The FASB’s proposed ASU seeks to provide relief for companies that have contracts impacted by reference rate reform. The proposals would provide companies with optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform.


All companies

Relevant dates

  • September 5, 2019 – FASB issued proposed ASU
  • October 7, 2019 – Comments due on proposed ASU

Key impacts

  • Companies would be permitted to elect optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions when they:
    • reference LIBOR or another reference rate expected to be discontinued due to reference rate reform; and
    • have modifications that change, or have the potential to change, the amount and timing of contractual cash flows related to the replacement of the reference rate.
  • The expedients and exceptions would not apply to contract modifications made, and hedging relationships entered into or evaluated after, December 31, 2022.  



Subscribe to our newsletter

Receive timely updates on accounting and financial reporting topics from KPMG.


Visit KPMG's Accounting Research Online for financial reporting resources.