In September 2012, EFRAG initiated a field test together with the ANC, ASCG, FRC and OIC on the Review Draft general hedge accounting. The results of the field test were communicated to the IASB in January 2013 together with the announcement that EFRAG would be undertaking a further consultation regarding macro hedge accounting, which was initiated by publishing a draft comment letter shortly after. EFRAG has now submitted the results of this second consultation to the IASB.

The input received from constituents in this supplementary consultation led to the following results:

• Significant uncertainty exists as to whether existing IAS 39 compliant portfolio hedge accounting practices will continue to be possible under the Review Draft.
• There is a significant risk that entities will be required to change their IAS 39 compliant portfolio hedge accounting practices twice.
• The term ‘macro hedging' would need to be defined as part of the development of the discussion paper on macro hedging.
• The respondents in the field test confirmed that the Review Draft introduces important improvements in the hedge accounting requirements.

EFRAG has considered several approaches including those suggested by constituents on how the above issues might be best addressed and has come to the conclusion that the most straightforward and practical way of ensuring that existing IAS 39 compliant portfolio hedging practices would not be affected by the Review Draft would be to provide entities a simple choice to either (1) retain IAS 39 hedge accounting for all of their hedges until either they decide to apply IFRS 9 irreversibly or the project on macro hedging is completed or (2) to adopt irreversibly the requirements of the Review Draft as drafted (including the exception in paragraph 6.1.3 on portfolio fair value hedges of interest rate risk).

Please click for access to the full comment letter on the EFRAG website.