Deloitte comments on IFRIC tentative agenda decisions
23 Oct 2006
At each of its meetings, the International Financial Reporting Interpretations Committee considers recommendations of its Agenda Committee about potential IFRIC agenda topics.
We support the IFRIC's decision not to take this item onto the agenda as IAS 39 is clear. We believe the rejection wording could be clearer in differentiating between assessment of hedge effectiveness (for the purposes of determining whether the hedge is 'highly effective' in accordance with IAS 39.88(e)) and measurement of effectiveness (for the purposes of determining the amount of hedge ineffectiveness to be recognised in profit or loss). Differentiating between assessment and measurement is the crux of this issue. We have proposed an amendment to the rejection wording included in the Appendix to make this clear. |