The IFRS Foundation provides free access (through Basic registration) to the PDF files of the current year’s IFRIC® Interpretations (Part A of the Issued Standards—the Red Book), as well as available translations of Interpretations.
This section also provides high level and non-technical summaries for the Interpretations.
The IFRS Foundation provides free access (through Basic registration) to the PDF files of the current year’s consolidated IFRS® Standards (Part A of the Issued Standards—the Red Book), the Conceptual Framework for Financial Reporting and IFRS Practice Statements, as well as available translations of Standards.
This section also provides high-level and non-technical summaries for the Standards.
In December 2018, the International Accounting Standards Board (IASB or the Board) added a project to assess the effects of Interbank Offered Rates (IBOR) reform on financial reporting. The project has two phases: the first focuses on issues leading up to IBOR reform. The IASB plans to issue an Exposure Draft in April or May, with an accelerated comment period, which would allow for final amendments to be published in late 2019. The second phase will focus on issues arising once the IBOR has undergone reform, such as the consequences of amending a hedge designation.
At its meeting on 8 February 2019, the IASB tentatively decided to make the following changes to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 9 Financial instruments:
• To provide relief solely from the effects of IBOR reform uncertainties on the ‘highly probable’ hedge accounting requirement, i.e., any potential amendments to the hedged item due to IBOR reform may be ignored when assessing whether the forecast transaction is highly probable.1 This relief will also apply when determining whether cash flows are still expected to occur, for cash flow hedge relationships that have already been discontinued for reasons other than IBOR reform and amounts remain in the cash flow hedge reserve.
• To provide relief under IAS 39 to require entities to consider only the existing contractual terms of the hedging instrument and hedged item to demonstrate whether a cash flow hedge or a fair value hedge is expected to be highly effective. Similarly, under IFRS 9, to consider only the existing contractual terms in assessing whether there is an economic relationship between the hedging instrument and the hedged item.
• Board members stressed the need for the amendments to set out specific requirements to ensure that the relief is as narrow as intended. For instance, the reference to ‘the existing contractual terms’ would need to be clarified, so as to avoid reference to existing general fall-back arrangements designed to deal with market disruption to IBOR.
• The Board agreed that the relief will be given only to those hedges that previously met the IAS 39 and IFRS 9 requirements. Otherwise, the Board decided that there is no need to provide relief from the IFRS 9 requirement that a designated hedge component should continue to be separately identifiable within the context of the particular market structure. The Staff Paper also proposes not to provide relief to designate a Risk Free Rate (RFR) risk component if it is not contractually specified in the hedged item and is not yet separately identifiable within the context of the market structure.
• The relief will cease to be available once the uncertainties related to IBOR reform cease. The details of when relief will terminate will be discussed in more detail at a later meeting.
• Also to be discussed further, is whether the relief will be optional or mandatory.
• The Board agreed to require specific disclosures about the extent to which application of the reliefs have affected hedge accounting.
• The Board also agreed that the proposed effective date should be for annual periods beginning on or after 1 January 2020, with earlier application permitted.