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Reference Rate Reform Resource Center 

Transitioning from LIBOR

The expected discontinuation of the London Interbank Offered Rate (LIBOR) in 2021 represents a seismic change to global finance. An estimated $350 trillion of outstanding contracts reference LIBOR, so a smooth migration to alternative reference rates is crucial to minimizing disruption in various markets worldwide. 

For businesses to ensure a successful transition, they must tackle operational challenges and consider accounting and tax ramifications, such as: 

  • Take inventory of their contracts that reference LIBOR. 
  • Analyze contracts for fallback language that accounts for the discontinuation of LIBOR 
  • Update systems that store contract information and perform calculations 
  • Determine whether contract changes qualify for optional accounting expedients (e.g., to assume changes to a debt agreement constitute a modification and not extinguishment )
  • Determine day  2 accounting for contracts that are modified
  • Understand ramifications to economic and accounting hedges involving LIBOR 

RSM professionals understand how businesses can best prepare for LIBOR to be discontinued. From analyzing business loans and lease agreements to derivatives and floating-rate notes, RSM’s collaborative approach across lines of business can ease a company’s transition by taking a customized approach to their specific needs. 


Related insights

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Proposal to clarify scope of reference rate reform guidance

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  • November 02, 2020

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Proactively managing the LIBOR transition

RECORDED WEBCAST

Proactively managing the LIBOR transition

An educational webcast to financial institutions of all sizes on LIBOR and proactively managing the transition at your institution.

  • August 20, 2020
The clock is ticking on the end of Libor: Does your firm have a plan?

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The clock is ticking on the end of Libor: Does your firm have a plan?

What makes the shift from Libor challenging is how deep and interwoven it is in every corner of the financial services industry.

  • August 10, 2020
Optional accounting expedients can make LIBOR transition easier

WHITE PAPER

Optional accounting expedients can make LIBOR transition easier

Temporary optional expedients and exceptions to account for the effects of LIBOR transition (e.g., contract modifications, hedge accounting)

  • August 05, 2020
GASB issues guidance for transition from Interbank Offered Rates

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GASB issues guidance for transition from Interbank Offered Rates

The GASB has issued guidance addressing financial reporting implications of the replacement of interbank offered rates.

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Accounting guidance for the effects of reference rate reform

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Accounting guidance for the effects of reference rate reform

The FASB recently provided temporary optional guidance intended to ease the burden reference rate reform on financial reporting.

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Key accounting and tax issues update for financial institutions

RECORDED WEBCAST

Key accounting and tax issues update for financial institutions

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  • December 18, 2019
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The Libor countdown—are you ready?

Concerns have been raised that replacing Libor with an alternative reference rate may trigger a number of challenges.

  • December 13, 2019

INSIGHT ARTICLE

IRS proposes regulations for the switch from LIBOR

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  • October 22, 2019

WHITE PAPER

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Information about the LIBOR phase out, identification of replacement rates and resultant operational and accounting considerations.

  • October 21, 2019

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Proposal addresses replacement of Interbank Offered Rates

A recent GASB proposal addresses financial reporting implications resulting from the replacement of an Interbank Offered Rate.

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Transitioning away from LIBOR

The FASB has added a project to its agenda to address accounting changes necessitated by reference rate reform.

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