At its meeting on February 8, 2019, the Board met to discuss proposed amendments to IFRS standards that would address concerns that may arise leading up to IBOR reform. Issues affecting financial reporting when IBOR reform is enacted (i.e., when contracts are actually amended) will be discussed during the second phase of the project. The Board tentatively decided that:

1. regarding the ‘highly probable’ requirement, IFRS 9 and IAS 39 should be amended to provide relief from the effects of uncertainties around the general conditions (timing and specifics) of the potential replacement of IBOR;
2. regarding the existence of an economic relationship (as required by IFRS 9) and the expectation that a hedge will be highly effective in achieving offsetting (as required by IAS 39), that IFRS 9 and IAS 39 should be amended to provide relief from uncertainties around the general conditions (timing and specifics) of the potential replacement of IBOR;
3. an entity should be allowed to continue hedge accounting when an IBOR risk component meets the separately identifiable requirement at the inception of the hedging relationship, although identification may be affected by IBOR reform in the future;
4. an entity should cease to apply the proposed relief when the nature and timing of designated future cash flows are certain;
5. an entity should provide specific disclosures about the extent to which it applies the proposed relief; and
6. an entity should apply the proposed amendments retrospectively, noting that the proposed effective date of the amendments is January 1, 2020 with earlier application permitted. The Board will discuss the following topics at a future meeting: optional application of the proposed relief; and certainty about the nature and timing of future cash flows and its interaction with ending the proposed relief.

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