IASB Publishes Summary of October 2019 Meeting of Advisory Forum
IASB published a summary of the meeting of the Accounting Standards Advisory Forum (ASAF), along with the agenda papers and recordings. The meeting was held on October 03, 2019 at the IFRS Foundation office in London. The key topics of discussion included financial instruments with characteristics of equity and interbank offered rate (IBOR) reform and its effects on financial reporting.
The objective of the session on IBOR reform was to provide an update to the ASAF members on the IBOR Reform project and request further inputs from the ASAF members on potential accounting issues to be considered by IASB during Phase II of the project. A member of the European Financial Reporting Advisory Group (EFRAG) suggested that IASB should focus on the main Phase II issues by adopting a more principle-based approach and by solving the most prominent ones first (that is, modification and derecognition), which might also affect continuity in hedge accounting. The Financial Reporting Council, UK (FRC) member agreed with this view and highlighted the importance of prioritizing the issues that are more urgent.
A member of the Korea Accounting Standards Board (KASB) emphasized modification of financial assets as the most important issue, as timing for IBOR reform gets closer. The KASB member noted that it might be necessary to review whether the IFRS Interpretations Committee’s opinion on this issue should be maintained. Additionally, some members asked IASB to consider multiple exposure hedges for Phase II, where entities manage both foreign currency risk and interest rate risk at the same time.
Moreover, ASAF members discussed the range of project direction alternatives for the project on financial instruments with characteristics of equity; these are the alternatives that were discussed by IASB at its September 2019 meeting. Most ASAF members were supportive of the tentative project direction decided by IASB—that is, making clarifying amendments to IAS 32 on presentation of financial instruments. IASB is mindful of the interaction between presentation and disclosure requirements and its decisions on classification. For example, it would be more efficient for stakeholders and IASB to consult on a comprehensive package that considers both classification and disclosures. Furthermore, developing disclosures independently of the classification requirements may require IASB to revisit disclosures once amendments to classification requirements are developed.
Keywords: International, Accounting, Banking, Securities, IBOR, Interest Rate Benchmarks, Financial Instruments, ASAF, IASB
Previous Article
EU Finalizes Rules on Sustainability-Related DisclosuresRelated Articles
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
EC Mandates ESAs to Propose Amendments to SFDR Technical Standards
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
EBA Examines Supervisory Practices, Issues Deposits Reporting Template
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
US Agency Publications Address Basel, Reporting, and CECL Developments
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
SEC Extends Comment Period on Climate Risk Disclosures
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
APRA Reduces Committed Liquidity Facility, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
EBA Updates Standards for 2023 Benchmarking of Internal Approaches
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
EIOPA Responds to Stakeholder Views on Blockchain in Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.
