CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. IASB Proposes Improvements To Hedge Accounting

IASB Proposes Improvements To Hedge Accounting

by Robin Pilgrim,, London

10 December 2010

The International Accounting Standards Board (IASB) on December 9 published for public comment an exposure draft on accounting for hedging activities.

The exposure draft proposes requirements that will enable companies to reflect their risk management activities better in their financial statements, and, in turn, help investors to understand the effect of those activities on future cash flows.

The proposed model is principle-based, and will more closely align hedge accounting with risk management activities undertaken by companies when hedging their financial and non-financial risk exposures. The proposals also include enhanced presentation and new disclosure requirements.

Commenting on the proposals, Sir David Tweedie, Chairman of the IASB, said:

“These proposals sweep away the existing rule-based, complex and inflexible hedge accounting requirements and replace them with a simple, principle-based approach.”

“The result, if adopted, will be a much simpler model that better reflects risk management practices whilst providing more useful information to investors.”

The exposure draft builds on proposals contained in the IASB’s discussion paper Reducing Complexity when Reporting Financial Instruments published in March 2008. The exposure draft forms part of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement, and when its proposals are confirmed they will be incorporated into IFRS 9 Financial Instruments.

The exposure draft, Hedge Accounting, which can be accessed on the IASB’s Snapshot Library, is open for comment until March 9, 2011. During the consultation period, the IASB will undertake further outreach to seek views on the proposals. The IASB will redeliberate the proposals with a view to completing the new hedge accounting requirements in the first half of 2011. In addition to the general hedge accounting proposals in the exposure draft, the IASB is continuing to discuss portfolio macro hedge accounting.

TAGS: tax | investment | accounting | investment funds | hedge funds | International Accounting Standards Board (IASB) | international financial reporting standards (IFRS) | financial reporting | standards | regulation

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »