On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity (HTM) debt securities, recognizing all Secured Overnight Refinancing Rate (SOFR) tenors as benchmark rates and permitting certain cross-currency swaps different reset dates in net investment hedges. ISDA recommends a one-time transition relief to add HTM securities to existing portfolio-layer-method hedges and reclassify selected HTM securities as available for sale, as well as an optional modified retrospective approach for existing term SOFR hedges. ISDA’s members consider the proposals clear, operationally straightforward and cost-beneficial, and encourage flexible adoption and finalization in time for the 2026 year-end reporting cycle.
Documents (1) for ISDA Response to FASB Hedge Accounting Guidance
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