- Report highlights IFRS and IAS accounting consequences of benchmark rate transition
- Recommendations of working group focus on hedge accounting
NotesThe working group on euro risk-free rates, for which the European Central Bank (ECB) provides the secretariat, is an industry-led group established in 2018 by the ECB, the Financial Services and Markets Authority (FSMA), the European Securities and Markets Authority (ESMA) and the European Commission. Its main tasks are to identify and recommend alternative risk-free rates and transition paths. To ensure that its recommendations are adopted by all market participants, the working group has created a sub-group on financial accounting and risk management. The sub-group was tasked with analysing the impact on financial accounting and risk management of (i) the transition from EONIA to the €STR, and (ii) the inclusion of fallbacks for EURIBOR based on a €STR-based term structure methodology and the possible fallback triggers. The sub-group consists of representatives of European and international credit institutions, consulting and accounting firms, clearing houses, and investment management firms and associations. The ECB, the FSMA, the ESMA and the European Commission take an observing role within the sub-group.
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