IFRS published agenda papers for the Accounting Standards Advisory Forum (ASAF) meeting to be held on July 11–12, 2019. One of the objectives of the meeting is to gather feedback from the ASAF members on potential accounting issues that should be considered by the Board during Phase II of the interbank offered rate (IBOR) reform and its effects on financial reporting project. The staff has asked the ASAF members to reach out to stakeholders in advance of the July 2019 ASAF meeting to help identify the relevant potential accounting issues.
In May 2019, the Board had, in the context of IBOR reform and its effects on financial reporting, published an exposure draft that proposed amendments to IFRS 9 on financial instruments and IAS 39 on recognition and measurement of financial instruments to provide relief from specific hedge accounting requirements. The Board decided to address these issues in Phase I because they may affect financial reporting before the reform is enacted. Other potential accounting issues will be addressed in Phase II. At the time of the discussions leading to the exposure draft, the Board noted that a range of issues could arise at different points in time due to the uneven timing of the replacement coupled with different approaches to replacement and different interest rate benchmarks being considered in different markets. These issues would be addressed during Phase II.
While the specific conditions and details of the reform have yet to be finalized, the staff started considering the potential accounting issues that could affect financial reporting when an existing interest rate benchmark is replaced with an alternative interest rate. The objective of Phase II is to assess the potential accounting implications of the reform, which were not considered in Phase I, and determine whether the Board should take further action.
Keywords: International, Accounting, Banking, IFRS 9, IAS 39, Financial Instruments, Hedge Accounting, IBOR, Reporting, Phase II, Interest Rate Benchmark, ASAF, IFRS
Previous ArticleAPRA Observations from Thematic Review on Recovery Plans of Insurers
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.