Recently Issued Accounting Pronouncements
|6 Months Ended|
Jun. 30, 2022
|Recently Issued Accounting Pronouncements [Abstract]|
|Recently Issued Accounting Pronouncements||
2. Recently Issued Accounting Pronouncements
Future Adoption of Recently Issued Accounting Pronouncements
The FASB has issued the following accounting pronouncement and guidance relevant to the Company’s operations which had not yet been adopted as of June 30, 2022:
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effect of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides relief for companies preparing for the discontinuation of LIBOR in response to the Financial Conduct Authority (the regulatory authority over LIBOR) plan for a phase out of regulatory oversight of LIBOR interest rate indices to allow for an orderly transition to an alternate reference rate. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to LIBOR for promissory notes or other contracts that are currently indexed to LIBOR. The ARRC has proposed a market transition plan to SOFR from LIBOR and organizations are currently working on transition plans as it relates to derivatives and cash markets exposed to LIBOR. Although the Company’s VOIs notes receivable from its borrowers are not indexed to LIBOR, as of June 30, 2022, the Company had $170.9 million of LIBOR indexed junior subordinated debentures and $24.8 million of LIBOR indexed receivable-backed notes payable. Companies can apply ASU 2020-04 immediately. However, the guidance will only be available for a limited time, generally through December 31, 2022. The Company has not yet adopted this standard and is evaluating the potential impact that the eventual replacement of the LIBOR benchmark interest rate could have on its results of operations, liquidity and consolidated financial statements.
The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef