Contracts filled with LIBOR references? Now what?

By 2022, LIBOR will be discontinued, which could mean big changes for companies. To help manage the transition, Heather Horn is joined by PwC partners Brian Staniszewski and Nick Milone to discuss the key accounting and financial reporting considerations when LIBOR is phased out.

Topics include:0:47 - Scope. The FASB issued new guidance to ease the potential accounting impacts when LIBOR is discontinued. Brian begins by sharing the scope of the guidance and to whom it will apply.5:15 - Accounting model. A broad variety of contracts are expected to be impacted by the LIBOR transition. Nick elaborates on the judgment that will be needed to evaluate whether a contract modification qualifies for an optional expedient.9:33 - Hedging. How will the transition from LIBOR affect hedge accounting? Brian shares insights on how the  guidance will provide relief for hedging relationships.15:32 - Other impacts. What are some of the other areas that could be impacted that companies should monitor? Nick explains.19:20 - Transition dates. Brian explains the effective date and transition provisions, and the sunset provisions, of the FASB’s guidance.Nick Milone is a partner in PwC’s Financial Markets practice where he advises companies on current accounting issues, and the application of accounting standards. Prior to this role, Nick was a Practice Fellow at the FASB, where he was a member of the Financial Instruments Team. As part of that team, Nick worked on the hedge accounting and recognition and measurement projects. Brian Staniszewski is a partner in PwC’s National Office. Brian helps engagement teams and clients principally in the financial services industry navigate a broad range of   technical topics, including hedging, derivatives, and credit losses. Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].