23 September 2008

EFRAG consults on initial assessments to IAS 39 - Eligible Hedged Items

EFRAG is consulting both on its assessment of the amendment against the EU endorsement criteria and on its initial assessment of the costs and benefits that would arise from the implementation of the amendment in the EU.

EFRAG invites comments to the endorsement for use in the EU of the amendment to IAS 39 Financial Instruments: Recognition and Measurement “Eligible Hedged Item”. It is consulting both on its assessment of the amendment against the EU endorsement criteria and on its initial assessment of the costs and benefits that would arise from the implementation of the amendment in the EU.

 

The amendment clarifies two aspects of existing IAS 39:

• when inflation can be designated as a hedged item in a financial instrument under the hedge accounting provisions in IAS 39, and
• how hedge accounting can be applied to hedges where a hedging instrument is an option contract.

 

EFRAG’s initial assessment is that the amendment meets the criteria for EU endorsement and that the benefits that will arise from its implementation in the EU are likely to exceed the costs incurred in implementing it.

 

Deadline for comments is 27 October 2008.

 

Invitation to Comment final

© EFRAG - European Financial Reporting Advisory Group