IASB will propose further amendments to IAS 39
21 Feb 2004
The IASB has agreed to propose amending IAS 39 to narrow the circumstances in which an entity will have the option to designate an individual financial asset or financial liability as one to be measured at fair value with changes in fair value recognised in profit or loss (the "fair value option").
The fair value option was added to IAS 39 by the recent Amendments to IAS 39. But after the amendments were published, some regulatory authorities in Europe questioned whether the Board intended the fair value option to be available for all financial instruments without any constraints. By vote of 11 to 3, the Board agreed in principle to propose amending IAS 39 to restrict the circumstances in which companies may choose the fair value option. The proposal will also include several other clarifications to IAS 39 for matters recently raised by the European Central Bank. Staff will develop an exposure draft for consideration by the Board at its March 2004 meeting.