At its meeting on June 20-21, 2018, the International Accounting Standards Board (the Board) discussed the derivative financial instruments that will be addressed in the first phase of the Dynamic Risk Management (DRM) project. The IASB also discussed designation and de-designation of derivatives. The IASB tentatively decided: the DRM model (a) should permit the use of interest rate swaps, including basis swaps and forward starting swaps, in addition to forward rate agreements; (b) options would be considered in the second phase of the model depending on the feedback received; (c) the DRM model should require formal designation and documentation of derivatives; and (d) the DRM model should require all designated derivatives to have a counterparty external to the reporting entity. The Board also started the discussion of financial performance in the context of the DRM accounting model and will continue these discussions in future meetings.

Review the IASB Update and podcast on the Board's Web site.