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14 September 2020

EFRAG'S endorsement advice on interest rate benchmark reform

Phase 2 (amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 AND IFRS 16)

EFRAG has submitted to the European Commission its Endorsement Advice on the IASB Amendment Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) ('the Amendments') for use in the European Union and European Economic Area.

The Amendments are needed to properly account for changes in the basis for determining the contractual cash flows of financial instruments and lease modifications accounted for under IFRS and to to deal with the implications on hedge accounting arising from the IBOR Reform, including avoiding the discontinuation of hedging relationships solely due to the impacts of the IBOR Reform. 

The Amendments become effective for annual periods beginning on or after 1 Ja​nuary 2021, with earlier application permitted.

EFRAG assesses that the Amendments meet all the technical endorse​ment criteria of the IAS Regulation and are conducive to the European public good. It therefore recommends their endorsement. EFRAG's recommendation can be found in the letter to the European Commission and the accompanying appendices.

EFRAG's Final Endorsement Advice on IBOR Reform - Phase 2 - Letter to the EC.pdf

EFRAG has also updated its Endorsement Status Report which can be found here.

Endorsement Advice Letter


© EFRAG - European Financial Reporting Advisory Group

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