Amendments to IAS 32 and IAS 39

Date recorded:

This past June, the IASB invited comments on its proposals to amend IAS 32 and IAS 39. The comment period expired on 14 October. The IASB has received more than 170 comment letters. The Board has decided to schedule a public roundtables with the objectives: improve the interaction between the Board and its constituents and to provide mutual education. The sessions will begin with the IASB's Standards Advisory Council on 24-25 February 2003. Then, those who submitted letters of comment will be invited to meet with the Board during the week of 10 March 2003. Exact dates and locations are to be determined.

The Board noted that it believes that it would be useful to integrate the text in IAS 32 and IAS 39 into a comprehensive Standard on financial instruments, along with the implementation guidance. Nevertheless, this project is more a 'packaging' project and is not a priority for the Board.

The preliminary consideration of the comments will focus on:

  • Classification of financial instruments as equity or liabilities:
    • economic compulsion
    • contingent settlement provisions
    • a parent's guarantee of a subsidiary's distributions
    • derivatives on interests in subsidiaries, associates and joint ventures
  • Derecognition:
    • pass through arrangement
    • financial guarantee derecognition
  • Impairment:
    • fair value measurement option
    • reversals of impairment on available for sale financial assets
    • measurement of financial guarantee
  • Hedge accounting:
    • Macro hedging (alternative approach)
    • Future transactions - Cash Flow Hedging

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