IASB issues revised standards for financial instruments
The International Accounting Standards Board (IASB) has issued revised versions of two standards, IAS 32 and IAS 39, which deal with the use of financial instruments.
The IASB added that it did not reconsider the fundamental approaches in the original standards for fear of delaying them. Rather, it was believed that the improvements should be released without delay, with a view to European listed companies complying by 2005.
One potential delay concerned the use of ‘macro hedging’- fair-value hedge accounting for a portfolio hedge of interest rate risk. The IASB said it would issue amendments to IAS 39 for macro hedging early next year.
The changes have brought the standards closer to their US equivalents, eliminating 10 differences, said the IASB.
At the end of June 2003, the Bank for International Settlements estimated the gross market value of over-the-counter derivatives contracts was $7.9 trillion. The IASB said that “virtually every company” had some level of exposure to these contracts.
“With thousands of companies being required to implement international standards it is essential that implementation is made easier,” said David Tweedie, chairman of the IASB.
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