On October 5, ISDA’s Accounting Committee responded to a consultation issued by the Financial Accounting Standards Board (FASB) seeking views from all stakeholders on the effect of derivative contract novations on existing hedge-accounting relationships. ISDA welcomes the proposal on the novation of derivatives and hedge accounting. We agree with the exposure draft’s conclusion that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in a hedging relationship under Topic 815, should not, in and of itself, require the de-designation of the relationship, provided that all other hedge-accounting criteria continue to be met. The ability to continue a hedge-accounting relationship under Topic 815 upon novation of a designated derivatives contract would help eliminate diversity in practice, simplify the application of hedge accounting, and provide more decision-useful information to users of financial statements.