IASB published a summary of its August meeting presenting the preliminary decisions of the Board. IASB met on August 28, 2019 to discuss certain identified issues and reviewed the feedback that was received on the exposure draft on interest rate benchmark reform at the July 2019 Board meeting. IASB also discussed specifics regarding the permission for balloting amendments to the new and old standards on financial instruments—IFRS 9 and IAS 39.
The key tentative decisions include the following:
- The scope of the exceptions proposed in the exposure draft should be clarified so the exceptions apply only to the hedging relationships directly affected by uncertainties about the timing or amount of interest rate benchmark-based cash flows of the hedged item or hedging instrument arising from the reform.
- Entities should be exempt from the disclosure requirements in paragraph 28(f) of IAS 8 on "Accounting Policies, Changes in Accounting Estimates and Errors," on the initial application of the amendments. The disclosure requirements accompanying the exceptions proposed in the exposure draft should also be simplified so that only certain specific information is required in the notes to the financial statements for hedging relationships directly affected by interest rate benchmark reform. This includes information regarding description of the significant interest rate benchmarks to which the entity’s hedging relationships are exposed and an explanation of how the entity is managing its transition to using an alternative interest rate benchmark.
IASB agreed that the amendments to IFRS 9 and IAS 39 should not be re-exposed. All Board members confirmed they were satisfied the Board has complied with the applicable due process and has undertaken sufficient consultation and analysis to begin the balloting process for the amendments to IFRS 9 and IAS 39.
Keywords: International, Accounting, Banking, Securities, IBOR, Interest Rate Benchmarks, Financial Instruments, IFRS 9, IAS 39, Disclosure Requirements, Hedging, IASB
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