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Deloitte Global comments on the IASB’s proposal on interest rate benchmark reform

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Jun 17, 2019

On June 17, 2019, De­loitte Global issued its comment letter in response to the IASB’s exposure draft, ‘Interest Rate Benchmark Reform — Proposed amendments to IFRS 9 and IAS 39’

Deloitte Global supports the IASB’s response in proposing amendments to both IFRS 9 and IAS 39 that deal with the immediate need of addressing the effect of the uncertainty arising from changes in benchmark interest rates on the “highly probable” requirement for cash flow hedges and the designated risk for cash flow and fair value hedges and suggest the IASB work on finalizing these amendments and begin the work on its second phase of amendments concurrently.

In addition, Deloitte Global believes there is a lack of clarity in (1) the application to retrospective hedge effectiveness, (2) the measurement of hedge ineffectiveness, and (3) whether the amounts deferred in the cash flow hedge reserve should be reclassified to profit or loss when the entity ceases applying the amendment.

Please download the full comment letter here.

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