Overnight Index Swap Rate Added to Hedge Accounting Benchmark List

In the latest Accounting Standards Update (“ASU”), the Financial Accounting Standards Board has added the Secured Overnight Financing Rate Overnight Index Swap Rate (“SOFR OIS”) to its list of hedge accounting benchmark interest rates permissible in U.S. GAAP. With ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate Overnight Index Swap Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, the SOFR OIS join the London Interbank Offered Rate swap rate, U.S. Treasury debt interest rates, and the OIS founded on the Fed Funds Effective Rate as benchmark rates allowed for hedge accounting.