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Handbook: Reference rate reform

Handbooks | March 2024

Latest edition: Our in-depth guidance on ASC 848’s optional relief for affected contracts and transactions.

Our updated guide explains the optional expedients in ASC 848 that permit an entity to not apply otherwise applicable US GAAP to contracts or transactions that are modified or otherwise affected due to reference rate reform. This March 2024 edition reflects changes in the status of the transition away from LIBOR and Bloomberg’s announcement that it will cease publishing all tenors of the Bloomberg Short-Term Bank Yield Index in November 2024.


  • ASC 848

All companies with contracts or hedging relationships that reference an interest rate that is expected to be discontinued (e.g. LIBOR)

Key impacts

LIBOR is a reference rate used in a wide variety of contracts, including loans, leases, investments, deposits and derivatives. However, LIBOR is being wound down and LIBOR’s administrator has ceased publishing information based on its historical panel bank methodology.

The array of affected contracts and transactions has led many companies to commit significant resources to transitioning contracts away from LIBOR in preparation for its eventual discontinuation. On top of managing the economic, operational and legal ramifications of the transition, companies also must determine the appropriate accounting for their transition activities.

To mitigate some of the accounting burden, the FASB issued ASC 848 (reference rate reform) – unique because it is dedicated to providing relief from otherwise applicable US GAAP requirements via optional expedients. Further, the guidance in ASC 848 is temporary in nature and sunsets on December 31, 2024.

Although ASC 848 provides significant relief, that relief has boundaries. Many of the optional expedients do not eliminate existing accounting requirements but instead permit entities to apply different – and generally less burdensome – analyses. In addition, each expedient has qualifying criteria that must be met.

We hope you will find this publication helpful in understanding the available relief – and when it is appropriate to apply that relief – as you manage your transition away from LIBOR.

Report contents

  • Scope of Topic 848
  • Contract modifications
  • Hedging relationships: Changes to critical terms
  • Fair value hedges
  • Cash flow hedges
  • Sale and/or transfer of HTM debt securities
  • Effective date, transition and termination

Download the document:

Reference rate reform

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Mark Northan
Partner, Dept. of Professional Practice, KPMG US
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Lisa Blackburn
Partner, Dept. of Professional Practice, KPMG US

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