Deloitte comment letters on proposed IAS 39 amendments
11 Oct 2004
We have posted three letters of comment submitted by Deloitte in response to the IASB's exposure drafts of proposed amendments to IAS 39: .
We have posted three letters of comment submitted by Deloitte in response to the IASB's exposure drafts of proposed amendments to IAS 39:
- (PDF 67k) – We welcome the move to clarify the accounting for the gain or loss after initial recognition. However, we believe that the proposed wording is not sufficiently clear. We also encourage the Board to work closely with the FASB on this so as to prevent difference between the two GAAPs.
- (PDF 67k) – We welcome the clarification that, in the consolidated financial statements, a group can designate, as a hedged item in a foreign currency cash flow hedge, a highly probable external transaction denominated in the functional currency of the subsidiary entering into the transaction, provided it gives rise to an exposure that will have an effect on consolidated profit or loss. We also believe that as part of the proposed amendment the standard should state clearly that a commitment between two group entities without another commitment with an outside party does not meet the definition of a firm commitment and, therefore such an internal hedge does not qualify for hedge accounting,
- (PDF 79k) – We support the proposed approach in the exposure draft that the legal form of a financial guarantee contract should not affect its accounting treatment, Therefore we strongly support the proposal to bring financial guarantee contracts within the scope of IAS 39 and to remove them from the scope of IFRS 4.