The International
Accounting Standards Board (IASB) has added requirements to IFRS 9,
a standard that deals with financial instruments, which will
complete the measurement phase to replace IAS 39.

The new requirements
issued by the IASB address the problem of volatility in P&L
statements arising from an issuer choosing to measure its own debt
at fair value.

With the new
requirements, an entity choosing to measure a liability at fair
value will present the portion of the change in its fair value due
to changes in the entity’s own credit risk in the other
comprehensive income section of the income statement, rather than
within P&L.

“The new additions to
IFRS 9 address the counter-intuitive way a company in severe
financial trouble can book a large profit based on its theoretical
ability to buy back its own debt at a reduced cost,” IASB chairman
David Tweedie said.

The IASB is aiming to
complete the second and third phases of IFRS 9 by 30 June 2011.
This will involve adding the impairment and hedge accounting
requirements to IFRS 9.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData