EFRAG considers the IASB proposals to be a "step in the right direction in addressing the inability to meet specific forward-looking hedge accounting requirements due to uncertainty that exists around the transition of interbank offered rates (IBORs) in the periods before the transition".  

Whilst supporting the proposals EFRAG is of the view that a number of changes are necessary most notably

• EFRAG suggests that relief from including the uncertainties of IBOR reform in the retrospective assessment is needed.
• EFRAG disagrees with not applying the proposed amendments retrospectively to hedges that were discontinued because entities were unable to apply the proposed reliefs, and suggests to assess whether structuring opportunities would not arise as a result of the ED not allowing reinstatement of such hedges.
• EFRAG finds that the objective of the proposed disclosures "lacking explicit justification, especially because the aim of the Amendments is to neutralise the impacts from IBOR transition".  EFRAG highlights that the proposed disclosures will be will require costly changes to the current reporting systems and is "not convinced" that the level of disclosures proposed will, in this stage, provide sufficient additional information to justify the increased cost.

With regards the second phase, EFRAG believes that it should be "addressed as soon as possible and in parallel to the finalisation of the first phase , without hindering the finalisation of the relief for the issues addressed in the first phase".  EFRAG suggests in an appendix a number of topics that could potentially be addressed in the second phase.

For more information, see the press release and final comment letter on the EFRAG site.