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EFRAG draft endorsement advice can be commented on until next Thursday

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

05 Jul 2013

The European Financial Reporting Advisory Group (EFRAG) has published draft endorsement advice on changes to IAS 36 and IAS 39. As a consequence of a request from the European Commission aimed at accelerating the endorsement process, the draft endorsement advice is only available for comment until 11 July 2013. EFRAG intends to deliberate on the final endorsement advice on 15 July 2013 and publish it as soon as possible.

The endorsement of the amendments regarding the novation of derivatives seems especially urgent. Amendments to existing standards can only be applied in the European Union after they have been endorsed and published in the Official Journal. At the same time, the amendments to IAS 39 published by the IASB on 27 June 2013 are available for early application. Therefore, the novation of a hedging derivative currently means in the European Union that the hedge accounting is discontinued while outside of the European Union this need not be the case.

The G20's efforts to improve transparency and regulatory oversight of over-the-counter (OTC) derivatives led to the adoption of the European Market Infrastructure Regulation (EMIR) which requires the novation of all hedging derivatives to a central counterparty. EMIR entered into force on 16 August 2012. The Commission Delegated Regulations supplementing EMIR were published in the Official Journal on 23 February 2013 and entered into force on 15 March 2013.

Please click for the following information on the EFRAG website:

EFRAG has updated its Endorsement Status Report to reflect the publication of the draft endorsement advice.

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