Amendment to IAS 39 - Cash Flow Hedge Accounting of Forecast Intra-group Transactions
Date recorded:
Representatives of Philips made a presentation to the Board. The presentation covered a series of transactions, including inter-group sales, that created risk exposures that require hedging as per the entity's policy. These illustrations highlighted the difficulty of applying the proposed amendment of IAS 39 to exposures that are generally common in practice. It also highlighted the difference between transaction risk and translation risk exposures.
One view expressed is that these issues arise in part because the IASB's proposed amendments have not gone far enough in converging with US GAAP.