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EFRAG issues feedback statement on general hedge accounting and macro hedging practices

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

24 Jul 2013

The European Financial Reporting Advisory Group (EFRAG) issued a feedback statement to summarise the work by the EFRAG during its field test of IFRS 9 Hedge Accounting Review Draft and the consultation on macro hedging practices.

In September 2012, the IASB published a review draft of a hedge accounting chapter of IFRS 9. The review draft was issue to allow constituents an opportunity to provide a fatal flaw review on the proposals. The EFRAG, along with European National Standards Setters, conducted a field test on the review draft to determine if there are any fatal flaws and to test how the proposals will work when performing actual transactions.

As a result of the field test, the EFRAG initiated an additional consultation concerning the impact on macro hedge accounting relationship proposed in the review draft and those currently existing under IAS 39. The outcome of the consultation resulted in two options, which are (1) retain IAS 39 hedge accounting for all of their hedges until either they decide to apply IFRS 9 irreversibly or the project on macro hedging is completed or (2) to adopt irreversibly the requirements of the Review Draft as drafted.

The feedback statement is available on the EFRAG website.

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