The IASB published for public comment a discussion paper Reducing Complexity in Reporting Financial Instruments. The document is the first stage in a project which aims to replace IAS 39 Financial Instruments: Recognition and Measurement.
The discussion paper analyses the main causes of complexity in reporting financial instruments and proposes possible intermediate approaches to address some of them.
Those approaches seek to improve and simplify measurement and hedge accounting by amending or replacing the existing requirements.
Furthermore the discussion paper sets out the arguments for and against a possible long-term approach that would use one measurement method for all types of financial instruments in the scope of a financial instruments standard.
The IASB seeks views on both the possible long-term and intermediate approaches and is interested to hear about possible alternatives on how it should proceed in developing new standards for reporting financial instruments that are principle-based and less complex.
The publication of the discussion paper also fulfils the commitment set out in the Memorandum of Understanding between the IASB and the US Financial Accounting Standards Board (FASB) A Roadmap for Convergence between IFRSs and US GAAP – 2006─2008. The discussion paper will be considered for publication by the FASB for comment by its constituents.
“IAS 39 is far too complex”, Sir David Tweedie, IASB Chairman, said. We are determined to simplify and improve IAS 39 by creating a principle-based standard.”
Deadline for comments is 19 September 2008.
Press release
Discussion paper
Project summary
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