Home   Site Map   Standards   Interpretations   Agenda   Structure   Newsletter   Resources   Jurisdictions   Links   Search

IAS 39 Financial Instruments: Identification of a Portion of an Exposure Eligible for Hedge Accounting

Go To List of IFRIC Issues The issue is whether a financial asset or financial liability can be designated as a hedged item with respect to only a portion of the risks of changes in its fair value or its cash flows. Discussion at the IFRIC Meeting July 2006: The IFRIC had previously asked the staff to explore whether the wording in IAS 39.AG100 could be used to establish a principle for identifying a portion that could be eligible to be used in hedge accounting. The IFRIC discussed the scope of the word 'portion' in IAS 39. The discussion focussed on different components of financial assets/liabilities and whether those components would be identifiable and reliably measurable. Some members said that a key issue would be whether the effect of an identified portion is predictable, since this would be required to perform prospective assessment of the hedge effectiveness. Decision. The IFRIC decided that the staff should prepare a paper exploring the scope of portions in relation to hedging under IAS 39. The staff should try to develop criteria for what could qualify as a portion.