Derivative toolkit: Navigating reference rate reform

In our Toolkit podcast series, we take a deep dive into one accounting topic each month that goes beyond the basics and into areas that require judgment. This month we are covering derivatives–a complicated area that generates numerous questions. 

In this episode, Heather Horn was joined by Bret Dooley and Chip Currie, partners in PwC’s National Office, and Nick Milone, a partner in PwC’s Financial Markets practice, to share practical insights for navigating the implications of reference rate reform on LIBOR-based derivatives.

In this episode, you will hear them discuss:

• 1:20 - The background on reference rate reform and how the discontinuation of LIBOR will impact companies
• 6:22 - The FASB’s response to reference rate reform (ASC 848) and its interaction with hedge accounting guidance
• 12:56 - How to think about LIBOR-based cash flow hedges
• 22:55 - How to think about LIBOR-based fair value hedges
• 33:12 - The FASB’s proposed extension of ASC 848 and final advice for companies with LIBOR-based derivatives

Want to learn more? Listen to other episodes in our derivative toolkit series, Do I have a derivative?, Hedging debt with derivatives, and Deciphering foreign currency hedging. For more on reference rate reform, listen to our podcast and refer to our Reference rate reform guide. 

Bret Dooley is a Deputy Chief Accountant in PwC’s National Office and the financial instruments accounting leader. He has over 25 years of experience specializing in the financial services, banking, and capital markets industries. Bret focuses on emerging financial reporting issues relating to financial instruments, developing interpretive guidance, and assisting clients in resolving complex accounting matters.

Chip Currie is a Partner in PwC’s National Office with over 25 years of experience assisting companies in resolving complex business and accounting issues. He concentrates on the accounting for financial instruments under both current and emerging standards and works with many of the firm's largest financial services clients and a number of non-financial service clients on treasury-related matters.

Nick Milone is a partner in PwC’s Financial Markets practice where he advises companies on current financial instruments issues and the application of accounting standards. Prior to this role, Nick was a Practice Fellow on the financial instruments team at the FASB, where he helped lead the hedge accounting and recognition and measurement projects.

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. 

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