The International Accounting Standards Board’s (IASB) Exposure Draft, “Interest Rate Benchmark Reform (Proposed amendments to IFRS 9 and IAS 39)” was issued in May 2019. This Exposure Draft focuses on the issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative interest rate. More specifically, the proposed amendments to IFRS 9 and IAS 39 address concerns related to uncertainties arising from Interest Rate Benchmark Reform on the hedge accounting requirements in IFRS 9 and IAS 39.
The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB. On June 17, 2019, we issued our own response letter to the IASB’s Exposure Draft.
We commend the IASB’s work to proactively respond to the global interest rate benchmark reform (the IBOR Reform). We support the IASB’s decision to provide relief to the forward-looking aspect of the hedged accounting requirements in the first phase of this project.
We strongly recommend the IASB continue to work on addressing the replacement issues in Phase 2 of the IBOR Reform project now to the extent possible, without causing delays to the finalization of Phase 1. We have separately elaborated on Phase 2 issues in Appendix 2 of the response letter.
Read the Board’s letter submitted to the IASB.
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Contact
Sean Wang, CPA, CA, CFA
Principal, Accounting Standards Board
Phone no.: +1 (416) 204-2969
Email: [email protected]