IASB publishes hedge accounting proposals...

The International Accounting Standards Board (IASB) has published a draft of proposed amendments, intended to clarify what can be designated a hedged item in hedge accounting.

It has created them in response to requests for guidance on IAS 39 Financial Instruments: Recognition and Measurement.

The IASB is undertaking research that will ultimately lead to IAS 39 being replaced, but this was described by the board as being “at an early stage”.

Its new draft specifies what risks can be designated as hedge risks and in addition, it clarifies “when an entity may designate a portion of the cash flows of a financial instrument as a hedged item”.

The IASB was created by the International Accounting Standards Committee Foundation. Its board members come from nine different countries and it aims to develop a single set of understandable and enforceable global accounting standards.

People wishing to comment on the proposals, which become generally available on the IASB website from September 17th, have until January 11th.