This IFRS Newsletter: Financial Instruments reports on the IASB macro hedging discussions.
The IASB has now completed its analysis of the feedback received on its April 2014 discussion paper on macro hedging.
In its March meeting, the Board looked at feedback on areas including:
For more detail on these discussions, read Issue 22 of our IFRS Newsletter: Financial Instruments (PDF 615 KB).
A range of ‘bigger picture’ views on the project were expressed towards the end of the meeting.
Overall, Board members seemed to agree that the direction of the project would need to be decided before undertaking section-by-section deliberations.
We expect the overall direction to be determined in future Board meetings.
“Now that the feedback on the DP has been considered, the IASB will need to decide on the direction of the project before the next phase can begin.”
|DP section||Feedback received|
|Revaluing managed exposures||Many respondents believed that the revaluation calculations would provide a faithful representation of dynamic risk management activities.|
|Presentation||Most respondents supported a ‘single net line item’ presentation in the statement of financial position and an ‘actual net interest income’ presentation in the statement of profit or loss and other comprehensive income. Wide-ranging concerns were raised on the gross presentation of internal derivatives.|
|Disclosures||Many respondents believed that robust disclosures are critical to achieving transparency and comparability.|
|Other considerations||Many respondents supported the proposals on when to include exposures in managed portfolios.|
|Applying the portfolio revaluation approach (PRA) to other risks||There were mixed views on applying the PRA to other risks.|
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