Companies can avoid confusion over accounting for financial products worth $350 trillion globally after the international standard setter said they don’t need to reflect reference interest rates in their financial reporting.
The International Accounting Standards Board provisionally agreed Feb. 8 to change accounting standards so companies no longer must state that financial products, such as loans and bond issues, are tied to specific reference rates. IASB agreed to waive the required statement until the replacement reference rates for the London Inter-bank Offered Rate (LIBOR) become clear.
IASB’s move will help maintain some certainty in valuing hedged contracts.
“It’s a sensible...