ASCG comment letter to ED/2019/1 Interest Rate Benchmark Reform

The ASCG has submitted its comment letter on ED/2019/1 Interest Rate Benchmark Reform (proposed amendments to IFRS 9 and IAS 39) to the IASB (we reported).

Therein we welcome the proposed relief from specific hedge accounting requirements. We agree with the IASB that the volatility resulting from the discontinuation of hedging relationships, solely due to uncertainty arising from the interest rate benchmark reform, would not provide decision-useful information.

In our comment letter we

• support the clarifying nature of the proposed amendments,
• suggest giving more attention to the different demands on hedge accounting in IFRS 9 and IAS 39, and
• question whether all of the disclosure requirements proposed are indeed proportionate and significant.

In addition, we encourage the IASB to consider issues that might affect financial reporting when interest rate benchmarks are replaced with alternative interest rates as soon as possible.