It has been a number of years since we have seen just one new accounting standard for a reporting period, but this is indeed the case for 31 December 2021 reporters.
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2 provides guidance on the removal of LIBOR to require an entity to:
- not have to derecognise or adjust the carrying amount of financial instruments for changes required by the reform, but to instead update the effective interest rate to reflect the change to the alternative benchmark rate,
- not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the hedge meets other hedge accounting criteria, and
- disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates.
We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.