Some of my  learning notes on this topic below:

One approach is the Yield Curve iapproache, which is used to support an Entity’s selection of a discount rate
often developed by third parties. A wel-known example is the Citigroup yield curve documented by a whitepaper to justify the product, as well as the methodology involved.
"Yield curves consist of broad universes of high quality bonds, with “above median” or “top quartile” yield curves representing various subsets of this broader universe."

Another approach is the hypotehtical bond portfolio. often known as hbp method. Regulations in Accounting Standards Codification 715 specifies how it could be constructed.
Throughout the Audit workflow, either approach adopted by the entity must be rigorously tested, especially changes have occured from previous year.