IAS 39 and IFRS 4 – Financial Guarantees and Credit Insurance

Date recorded:

(morning only)

Following Wednesday's discussion, the staff presented to the Board, four options:

1. Not to proceed with the ED. This would mean abandoning, at this time, the IAS 39 revisions therein.

2. Proceed with the ED in its present form.

3. Amend IFRS 4 to make IAS 37 provisions mandatory. This would change accounting for insurance contracts which would not be consistent with the original intention of IFRS 4.

4. Allow a free choice between IAS 39 and IFRS 4, after the following amendments: a. IAS 39, incorporate the ED amendments thereto, or IFRS 4 as is currently drafted. b. IAS 39, incorporate the ED amendments thereto, or IFRS 4 including an IAS 37 adequacy test which would be a 'strengthening' of the IFRS 4 adequacy test, only for such contracts.

After much discussion the Board agreed to proceed with 4b.

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