IRS Ditches Fair Market Value Provision In Final Libor Rules

By Joshua Rosenberg (January 4, 2022, 4:39 PM EST) -- The IRS released final rules meant to ease the transition away from the Libor benchmark rate by which international banks borrow from one another, doing away with a fair market value requirement that was included in the proposed rules.

In the final rules unveiled Dec. 30, the Internal Revenue Service abandoned a provision from the proposed regulations requiring the fair market value of a contract modified to transition away from a discontinued interbank offered rate, or IBOR, such as Libor to be substantially equivalent before and after the change was made.

Instead, the agency outlined several contract modifications that would not...

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