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IFRS 3/IAS 39 – Hedging the foreign exchange risk in a business combination (new)

Date recorded:

IFRS 3 Business Combinations and IAS 39 Financial Instruments Recognition and Measurement - Hedging the foreign exchange risk in a business combination

The Committee considered a request to clarify whether gains or losses arising from hedging the risk of changes in the amount of the consideration paid in a business combination, due to movements in foreign exchange rates, would qualify as being part of the consideration transferred in accordance with paragraph 37 of IFRS 3 (revised 2008) Business Combinations.

The Committee noted that they did not expect diversity in practice in this area, since paragraph AG 98 in IAS 39 Financial Instruments: Recognition and Measurement provides clear guidance. Therefore the Committee initially agreed to propose that the issue should not be included in Annual Improvements.