IASB's proposals for amendments to IAS 39 Financial Instruments

28 February 2013

The IASB published for public comment with a 30-day comment period an ED of proposed amendments to IAS 39 Financial Instruments: Recognition and Measurement. Corresponding requirements are proposed to be included in the forthcoming hedge accounting chapter in IFRS 9 Financial Instruments.

The objective of the proposed amendments is to introduce a narrow scope exception to the requirement for the discontinuation of hedge accounting in IAS 39.  Specifically, they propose an exception when a derivative that has been designated as a hedging instrument, is novated from one counterparty to a central counterparty (CCP), as a consequence of new laws or regulations if specific conditions are met (in this context, novation of the derivative contract is the substitution of the original counterparty to the contract for a new counterparty, being a CCP).

The IASB considered the fact that the legislative changes that would require such novation of derivatives would be widespread across jurisdictions. These legislative changes were prompted by a G20 commitment to improve transparency and regulatory oversight of over-the-counter derivatives in an internationally consistent and non-discriminatory way.

Press release

Exposure draft

© IASB - International Accounting Standards Board