EU published Regulation 2020/34 regarding the International Accounting Standard (IAS) 39 and International Financial Reporting Standards (IFRS) 7 and 9. Regulation 2020/34 amends Regulation (EC) No 1126/2008, which adopts certain international accounting standards in accordance with the Regulation (EC) No 1606/2002. The amendments relate to the financial reporting consequences of the interest rate benchmark reform. Regulation 2020/34 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
IASB had published, on September 26, 2019, the interest rate benchmark reform related amendments to IFRS 9, IAS 39, and IFRS 7. These amendments were intended to address the financial reporting consequences of the interest rate benchmark reform in the period before the replacement of an existing interest rate benchmark with an alternative reference rate. The amendments provided temporary and narrow exemptions to the hedge accounting requirements of IAS 39 and IFRS 9 to enable companies to continue to meet the requirements, assuming that the existing interest rate benchmarks are not altered because of the interbank offered rate, or IBOR, reform. Following a consultation with the European Financial Reporting Advisory Group (EFRAG), EC concluded that the amendments to IAS 39, IFRS 7, and IFRS 9 meet the criteria for adoption set out in Article 3(2) of Regulation (EC) 1606/2002. Accordingly, this amending regulation has been issued.
The amendments for the accounting standards of IAS 39, IFRS 9, and IFRS 7 relate to the respective chapters in the regulation (No 1126/2008) on hedge accounting and on effective date and transition. The amendments have been described in Article 1 and detailed in Annex to the Regulation 2020/34. Each company shall apply the amendments at the latest, as from the commencement date of its first financial year starting on or after January 01, 2020.
Related Link: Regulation 2020/34
Effective Date: February 05, 2020
Keywords: Europe, EU, IAS 39, IFRS 9, IFRS 7, Financial Instruments, Interest Rate Benchmarks, Reporting, European Council, Interest Rate Risk, Hedging, EC, European Parliament
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