[Revised to incorporate additional accounting considerations for the use of Fallback Rate (SOR) in financial contracts/hedge accounting and the assessment of SPPI criterion for financial contracts referencing SORA compounded in advance]
FRB 9 (Revised), issued on 21 February 2022, share accounting considerations on specific matters to assist entities in their understanding of the accounting for financial instruments and hedge accounting which are affected by the replacement of interest rate benchmarks within these contracts.
FRB 9 (Revised) has been updated from FRB 9 (issued on 14 October 2021) for the following:
- Additional background information on Fallback Rate (SOR);
- New accounting consideration for the assessment of benchmark interest rates based on SORA compounded in advance meeting SPPI criterion; and
- New accounting considerations on the use of Fallback Rate (SOR) in financial contracts and hedge accounting