IFRS 9 (2013) provides more opportunities for hedge accounting.
The new general hedge accounting standard issued by the IASB – part of IFRS 9 Financial Instruments (2013) – will align hedge accounting more closely with risk management.
The new standard does not fundamentally change the types of hedging relationships or the requirement to measure and recognise ineffectiveness.
However, more hedging strategies that are used for risk management will qualify for hedge accounting.
Our suite of publications can help you to understand the new requirements and the possible impacts for your business – from high-level summary (PDF 1,164 KB) to detailed analysis (PDF 3,269 KB) and interpretative guidance.
No voluntary termination of otherwise qualifying hedging relationships
A company will not be allowed to voluntarily terminate a hedging relationship that continues to meet its risk management objective and all other qualifying criteria.
A company may be required to rebalance hedging relationships that are not behaving in the expected manner, by adjusting the quantities of the hedged item or the hedging instrument to maintain a hedge ratio that complies with the hedge effectiveness requirements.
Hedge accounting available for broader range of hedging strategies
The new standard specifies the accounting treatment for a wider range of risk management strategies, including:
In addition, cash instruments may be hedging instruments in more cases.
Other differences from current practice
Assessing the effectiveness of a hedging relationship will require more judgement, and the application guidance in some areas remains complex.
Significant effort may be needed to analyse the requirements and their impact, while changes to current practice may lead to additional systems requirements.
Read our In the Headlines (PDF 1,164 KB) for a high-level summary of the new requirements and their possible impacts for your business.
Our First Impressions (PDF 3,264 KB) provides our detailed analysis, pooling the insights and experience of our financial instruments teams globally to guide you through the requirements of the new standard.
In 2014, the IASB published the complete version of IFRS 9, which supplements the general hedge accounting requirements published in IFRS 9 (2013). For more information, visit our page Financial instruments – Introducing IFRS 9.
And Insights into IFRS provides our complete work of interpretative guidance on the new standard.
Visit our IFRS – Financial instruments hot topics page for the latest on these and other aspects of financial instruments accounting under IFRS.
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