LIBOR’s Looming End Leaves Hedgers, Lenders in a Bind

The demise of the world’s most widely used—but scandal-tinged—interest rate will have significant accounting and financial reporting ramifications beyond its expected market shakeup.

The London InterBank Offered Rate is tied to hundreds of trillions of dollars’ worth of debt, loans, and derivatives. Its expiration at the end of 2021, with no clear replacement benchmark on the horizon, is causing headaches for financial professionals and accountants worldwide as they try to figure out how to restructure debt and hedging contracts.

“This is really so pervasive, it’s going to affect literally every company out there,” said Ernie de Lachica, senior director at ...