IAS 39 — Application of the effective interest rate method

Date recorded:

The IFRIC confirmed its tentative decision taken in May 2008 not to provide guidance on the application of the effective interest rate method to a financial instrument whose cash flows are linked to changes in an inflation index.

In doing so, the IFRIC referred the issue to the IASB. A Board observer noted that the IASB would most likely decide to address the issue as part of the project on 'reducing complexity' in financial instrument accounting. Consequently, it is unlikely that the issue would be resolved in the short term.

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