The International Accounting Standards Board (Board) has proposed amendments to IFRS Standards to assist companies in providing useful information to investors about the effects of interest rate benchmark reform on financial statements.
The Board has been considering the effects of interest rate benchmark reform on financial reporting since 2018, splitting its work into two phases. The first phase culminated in amendments to some IFRS Standards in September 2019, providing temporary exceptions to specific hedge accounting requirements and requiring related disclosures in the period during which there is uncertainty about contractual cash flows arising from interest rate benchmark reform.
The Board has now published further proposed amendments as part of the second phase of its project. These proposed amendments aim to address issues affecting financial statements when changes are made to contractual cash flows and hedging relationships as a result of the reform.
The main proposed amendments relate to:
Hans Hoogervorst, Chair of the International Accounting Standards Board, said:
The Board is working to an accelerated timeframe to finalise the required amendments to IFRS Standards so that investors continue to receive useful information and that companies are supported in their financial reporting as jurisdictions complete their interest rate benchmark reforms.
The consultation document proposes amendments to the following Standards:
To read and comment on the Exposure Draft, please go to the comment letter page. The comment deadline is 25 May 2020.
The Snapshot provides a summary of the project and the proposals.