This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

IAS 39 – The fair value option: transition issue

Date recorded:

The staff made a viva voce presentation (that is, there were no papers, either for the Board or Observers) on an issue that several insurance companies had asked to have highlighted. The staff noted that the issue was not a new matter and had been discussed at the time the Fair Value Option had been approved.

The issue had to do with the restatement of comparatives and affected first-time adopters especially. There was a potential problem between the definitions in IAS 39 paragraphs 9(b)(i) and 9(b)(ii) and the look-back period permitted when an entity adopts IAS 39 for the first time. The insurance companies were concerned about 'undue restrictions' on designation and a lack of comparability between current and comparative periods.

Board members held a brief discussion on the topic, but agreed that the issue was one of which they were aware when they approved the amendment to the Fair Value Option in April 2005. There was no appetite to re-open the decisions, especially because to do so might necessitate additional due process, which would delay the issue of an amendment that was considered important by constituents.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.