Update on IAS 39 Issues in Europe

Date recorded:

The Board received an update on issues raised in Europe related to the application of IAS 39 and discussed the following two key issues:

  • Presentation of changes in fair value related to cash flow hedges.
  • Issues related to interest margin hedging.

The Board discussed a proposal for presentation of fair value changes related to cash flow hedges presented to it by a section of the European banking group. The Board generally rejected the proposal as it is not in accordance with IAS 1. The Board did note that they believed presentation of permanent and non-permanent equity would be allowed under IAS 1.

The Board noted that several issues related to hedging interest margins have been raised and that a group should be convened to address those issues as a matter of urgency. The members will be determined as soon as possible.

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