The US Governmental Accounting Standards Board
(GASB) has issued a proposal draft for applying termination of
hedge accounting provisions.
The draft amends the GASB Statement No. 53,
Accounting and Financial Reporting for Derivative Instruments.
The GASB said the provisions of the proposed
draft statement are limited to when a swap represents a liability
of a government, the replacement of the counterparty or credit
support provider meets the criteria of an assignment or
in-substance assignment, and other swap terms are unchanged. “When
this is the case, the hedging derivative would not be considered to
be terminated for accounting and financial reporting purposes, and
hedge accounting would continue to be applied,” GASB said.
The draft is open for comment until 15
April.
