IASB Publishes Amendments Related to IBOR Reform

The IASB has issued Interest Rate Benchmark Reform — amendments to IFRS 9, IAS 39 and IFRS 7.

The amendments “are designed to support the provision of useful financial information by companies during the period of uncertainty arising from the phasing out of interest-rate benchmarks such as interbank offered rates (IBORs).” Specifically, the amendments:

• Modify specific hedge accounting requirements so that entities would apply those requirements if the interest rate benchmark on which the hedged cash flows and cash flows from the hedging instrument are based will not be altered because of interest rate benchmark reform.
• Apply to all hedging relationships that are directly affected by the interest rate benchmark reform.
• Require specific disclosures about the extent to which the entities’ hedging relationships are affected by the amendments.

The amendments are effective for annual periods beginning on or after January 1, 2020, and must be applied retrospectively.

Early application is permitted. For more information, see the press release on the IASB’s Web site as well as the IAS Plus project page.