Financial instruments
Amendments to standards
Eligible Hedged Items
In July 2008, the IASB issued an amendment to give additional guidance on the designation of a hedged item. The amendment clarifies how the existing principles underlying hedge accounting should be applied in two particular situations. It clarifies the designation of:
(a) a one-sided risk in a hedged item and
(b) inflation in a financial hedged item
Click here for more on the Eligible Hedged Items project
Puttable Instruments & Obligations Arising on Liquidation
In February 2008 the IASB issued amendments to improve the accounting for particular types of financial instruments that have characteristics similar to ordinary shares but presently are classified as financial liabilities. Under the limited scope amendments, the following types of financial instruments will be classified as equity, provided they have particular features and meet specific conditions:
(a) puttable financial instruments and
(b) instruments that impose on the entity an obligation to deliver a pro rata share of the net assets of the entity only on liquidation.
Click here for more on the puttable instruments project
Long term projects on financial instruments
The Memorandum of Understanding (MoU) between the FASB and the IASB envisages the publication of one or more due process documents on financial instruments.
The three long term projects relating to financial instruments are:
- Derecognition of Financial Instruments, Click here for more on this project
- Financial Instruments with Characteristics of Equity, Click here for more on this project
- Replacement of IAS 39, Click here for more on this project
Related groups and projects
The Financial Instruments Working Group (FIWG)
The FIWG will help the IASB take a fresh look at accounting issues related to financial instruments by examining and questioning the fundamentals of those standards within the context of the IASB’s Framework.
Click here for more on the Financial Instruments Working Group (FIWG)
IFRIC related projects
The International Financial Reporting Interpretations Committee (IFRIC) reviews, within the context of current International Financial Reporting Standards (IFRSs) and the IASB Framework, accounting issues that are likely to receive divergent or unacceptable treatment in the absence of authoritative guidance. IFRIC’s goal is to reach consensus on the appropriate accounting treatment on a timely basis. IFRIC projects relating to IAS 32 and IAS 39 can be found on the IFRIC website.
Click here for more on IFRIC.