Deloitte comment letter on ED/2010/13 'Hedge Accounting'
We support the IASB’s efforts to reform financial instruments accounting with the development of IFRS 9 Financial Instruments. Hedge accounting is an important part of the project and we support the Board’s attempt to improve the financial reporting of risk management activities with proposed changes to hedge accounting.
Although generally supportive of the ED, we have concerns with a number of the proposed detailed requirements, including, but not limited to, the effectiveness threshold, the recognition of time value of options, the prohibition on hedge accounting for risks that affect only other comprehensive income and the presentation of fair value hedges. We believe these and the other issues detailed in the Appendix to the letter should be addressed before finalisation of this standard.