The International Accounting Standards Board (IASB) has amended some of its requirements for hedge accounting.
The amendments are designed to support the provision of useful financial information by companies during the period of uncertainty arising from the phasing out of interest-rate benchmarks such as interbank offered rates (IBORs)
The IASB amended new and old financial instruments Standards, IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement, as well as the related Standard on disclosures, IFRS 7 Financial Instruments: Disclosures.
The amendments modify some specific hedge accounting requirements to provide relief from potential effects of the uncertainty caused by the IBOR reform. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties.
IASB chair Hans Hoogervorst said: “The Board has worked to an accelerated timetable to give companies a solution to the accounting challenges they face from the uncertainty surrounding the reform of interest- rate benchmarks. The amendments provide useful information for investors during this period of uncertainty.”
The amendments come into effect from 1 January 2020 but companies may choose to apply them earlier.
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