Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

Wednesday, December 20, 2017 FASB Board Meeting

Agenda decision—benchmark interest rate:  overnight index swap rate based on the secured overnight financing rate (SOFR OIS). The Board discussed a potential project to add the SOFR OIS rate as a benchmark interest rate for hedge accounting purposes in Topic 815, Derivatives and Hedging. The Board decided to:
  1. Add a project to the FASB’s technical agenda to consider adding the SOFR OIS rate as a benchmark interest rate for hedge accounting purposes.
  2. Add the SOFR OIS rate as a benchmark interest rate for fair value hedges of fixed-rate financial instruments and cash flow hedges of forecasted purchases or issuances of fixed-rate financial instruments.
  3. Require that the proposed amendments resulting from this issue be applied on a prospective basis.
  4. Include a question in the Questions for Respondents section of the proposed Accounting Standards Update asking whether the Board should establish a broader SOFR swap rate as a benchmark interest rate.
Analysis of Costs and Benefits

The Board concluded that it has received sufficient information and analysis to make an informed decision on the issues presented and that the expected benefits of the proposed amendments justify the expected costs.

Next Steps

The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot with a comment period ending on March 30, 2018.