IAS39: Financial Instruments, Recognition and Measurement: Exposure draft of Proposed Amendments

The ACT is concerned that proposed accounting rules for financial instruments threaten – unless amended by the IASB – to have major adverse impact on treasury best practice in non-financial sector companies.

Two key points are being urged by the ACT on the IASB:

• Central netting should qualify for hedge treatment in consolidated (group) accounts
• Prospective hedge effectiveness should

The ACT commented last week to the IASB (International Accounting Standards Board) in response to the Exposure Draft from the IASB, “Exposure Draft of Proposed Amendments to IAS39 Financial Instruments: Recognition and Measurement: Fair Value Hedge Accounting for a Portfolio Hedge of Interest Rate Risk”.

The ACT welcomed the new flexibility included in the exposure draft but believes that before IAS 39 is finalised – and before it is adopted by the EU - certain outstanding points must be properly dealt with.