The International Accounting Standards Board (IASB) met on May 5th to continue its work on the replacement of IAS 39, Financial Instruments: Recognition and Measurement. IAS 39 sets out requirements for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. IAS 39 officially was issued in 1998 and has been amended multiple times over the last 11 years.
In the KPMG 'Top Ten' of IFRS standards, IAS 39 was rated number one i.e. likely to have the most dramatic effect on reported results.
Work on this project began in 2008, with discussions dating back to 2005.
Why replace this standard? It is viewed by many as too complex. A replacement needs to improve the decision usefulness of the information for users. There is a high likelihood that it will be replaced.
At the May 5th meeting, focus was given to a possible remeasurement method based on discounted cash flows. Other possibilities being considered include amortized cost and “exit price” as defined in FAS 157.
In the KPMG 'Top Ten' of IFRS standards, IAS 39 was rated number one i.e. likely to have the most dramatic effect on reported results.
Work on this project began in 2008, with discussions dating back to 2005.
Why replace this standard? It is viewed by many as too complex. A replacement needs to improve the decision usefulness of the information for users. There is a high likelihood that it will be replaced.
At the May 5th meeting, focus was given to a possible remeasurement method based on discounted cash flows. Other possibilities being considered include amortized cost and “exit price” as defined in FAS 157.
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