IFRIC has released a draft Interpretation,
IFRIC D22, on ‘Hedges of a Net Investment in a Foreign Operation’.
IFRIC D22 clarifies two issues that have arisen on two accounting standards -
IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’ and ‘
IAS 39 Financial Instruments: Recognition and Measurement’ - about the accounting for hedging foreign currency risk within a company and its foreign operations.
The IFRIC proposal clarifies what qualifies as a risk in the hedge of a net investment in a foreign operation and where within a group the instrument that offsets that risk may be held. IFRIC D22 would be applied prospectively, that is, for all future transactions. Deadline for comments is 19 October 2007.
Press release
© IASB - International Accounting Standards Board
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