Featured Product

    IASB Decides on Effective Date for Phase 2 Benchmark Reform Proposal

    June 26, 2020

    IASB published a summary of its June meeting, including the preliminary decisions of the Board. IASB met on June 25, 2020 to discuss the feedback on its exposure draft on interest rate benchmark reform. The exposure draft proposed amendments to IAS 39 and IFRS 9, the old and new standards on financial instruments, respectively; IFRS 7 on disclosures of financial instruments; IFRS 4 on insurance contracts; and IFRS 16 on leases. This is Phase 2 of the IASB project on interest rate benchmark reform. The Board tentatively decided to finalize the effective date proposed in the exposure draft—that is, entities would be required to apply the amendments for annual periods beginning on or after January 01, 2021, with earlier application permitted.

    At its meeting, the Board tentatively decided to:

    • Finalize without substantial changes the proposals set out in the draft amendments to IFRS 9, IFRS 4, and IFRS 16, with respect to modifications of financial assets and financial liabilities.
    • Finalize the proposals in the exposure draft related to the changes required to hedging relationships and clarify that the changes to the hedging relationships have to be made by the end of the reporting period, during which uncertainty with respect to a specific element of the relationship has been resolved.
    • Finalize the proposals in the exposure draft, subject to clarifying that the 24-month period applies to the individual alternative benchmark rate and hence begins from the date that an entity designates a particular alternative benchmark rate as the hedged risk for the first time.
    • Finalize the transition requirements proposed in the exposure draft with one change to the requirement for reinstating particular discontinued hedging relationships. 
    • Finalize the proposed amendments in paragraphs 24I–24J of the exposure draft, related to disclosures, subject to changing the amendment proposed in paragraph 24J(b) and deleting the disclosure requirement proposed in paragraph 24J(c) of the exposure draft. 
    • Clarify that, for the changes required to a hedging instrument, modifications required by the interest rate benchmark reform could be made in ways other than by modifying the contractual terms of the hedging instrument. This could be made as long as the hedging instrument is not de-recognized and the outcome is economically equivalent to modifying the hedging instrument to refer to an alternative benchmark rate.
    • Make no substantial changes to the proposals in the exposure draft in response to issues related to classification of financial assets and embedded derivatives.

    At the July 2020 Board meeting, IASB plans to discuss feedback on the proposals, in the exposure draft, on accounting for qualifying hedging relationships and groups of items, as well as any sweep issues that may arise. IASB will also discuss beginning the balloting process for the amendments.

     

    Keywords: International, Accounting, Banking, Securities, Insurance, IBOR, Interest Rate Benchmarks, Financial Instruments, IFRS 9, IAS 39, Hedging, Disclosures, Insurance Contracts, IASB

    Featured Experts
    Related Articles
    News

    PRA Proposes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    PRA proposed rules (in CP12/21) for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies that have been approved or designated in accordance with Part 12B of the Financial Services and Markets Act 2000 (FSMA).

    June 21, 2021 WebPage Regulatory News
    News

    ECB Extends Leverage Ratio Relief for Banks Until March 2022

    ECB Banking Supervision announced that euro area banks it directly supervises may continue to exclude certain central bank exposures from the leverage ratio until March 2022.

    June 18, 2021 WebPage Regulatory News
    News

    OSFI Consults on Treatment of Credit Valuation Adjustments

    OSFI decided to increase the Domestic Stability Buffer from 1.00% to 2.50% of total risk-weighted assets, with effect from October 31, 2021.

    June 18, 2021 WebPage Regulatory News
    News

    HKMA Requires Banks to Submit Plans for Fintech Adoption

    HKMA is requesting banks to participate in a tech baseline assessment, which forms part of the HKMA Fintech 2025 strategy.

    June 18, 2021 WebPage Regulatory News
    News

    OSFI Consults on Operational Risk Capital Data Management Expectations

    OSFI published two documents to consult on the management of operational risk capital data for institutions required, or for those applying, to use the Basel III standardized approach for operational risk capital in Canada.

    June 18, 2021 WebPage Regulatory News
    News

    NGFS on Addressing Financial Stability Issues from Biodiversity Loss

    The NGFS Study Group on Biodiversity and Financial Stability published a Vision paper exploring the case for action in addressing the financial stability concerns arising from biodiversity loss.

    June 18, 2021 WebPage Regulatory News
    News

    ACPR Publishes CREDITIMMO Version 2.3.0 Taxonomy for Banks

    ACPR published the final version of CREDITIMMO 2.3.0 taxonomy for the decree of October 31, 2021.

    June 18, 2021 WebPage Regulatory News
    News

    EC Prolongs Italian Guarantee Scheme for Non-Performing Loans

    EC, has approved, under the EU State Aid rules, the fourth prolongation of the Italian guarantee scheme to facilitate the securitization of non-performing loans.

    June 18, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7128