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EFRAG considers that it is premature, and perhaps even inappropriate, to decide that the long-term objective should be full fair value for financial instruments and that changes to IAS 39 should be made only if they represent a step towards that objective.
EFRAG emphasises that it is essential that the long-awaited comprehensive debate about measurement takes place as soon as possible.
In a longer-term, EFRAG recommends simplifying and improving the way financial instruments are categorised for measurement purposes and developing a principle-based hedge accounting model that would better reflect sound risk management practices and their impact on the economic performance of the entity.
In the shorter-term, a number of improvements can be made that will meet the cost-benefit test in such areas of financial instruments reporting as embedded derivative requirements, some aspects of hedge accounting, impairment loss recognition and fair value measurement guidance. Opportunities to simplify aspects of financial instruments accounting should be explored as part of the existing Financial Statement Presentation project.