ASB Permits Reclassification Of Financial Instruments
Further to its announcement on 16 October 2008, the Accounting
Standards Board (ASB) has issued amendments to FRS 26 (IAS 39) ‘Financial
Instruments: Recognition and Measurement’ and FRS 29 (IFRS 7) ‘Financial
Instruments: Disclosures’ that would permit the reclassification of certain
financial instruments. The amendments arise as a consequence of the amendments to IAS 39 and IFRS
7 published by the International Accounting Standards Board (IASB) on 13 October
2008. The amendments issued by the IASB address the desire expressed in a number
of quarters, including EU leaders and finance ministers, to reduce the differences
between IFRS and US Generally Accepted Accounting Principles. In moving to issue the amendments, the ASB – like the IASB – has
not followed its normal due process, given the need to take urgent action to
address the rare circumstances of the current credit crisis. The ASB wants to
ensure that entities applying FRS 26 and FRS 29 have the same ability to be
able to make reclassifications as those applying IFRS. Entities may use the reclassification amendments, if they so wish, from 1 July
2008. .
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