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In 2020, FASB issued Accounting Standards Update (ASU) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provided temporary, optional expedients and exceptions for applying generally accepted accounting principles to held-to-maturity securities, contracts, hedging relationships, and other transactions affected by reference rate reform. FASB recently issued ASU 2021-01, Scope, which expands the scope of guidance in Accounting Standards Codification 848, Reference Rate Reform, so that companies can apply the optional expedients to derivative instruments affected by clearing house changes. This article provides details on ASU 2021-01, which also clarifies and updates several items in ASU 2020-04.

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