The transition date for new UK GAAP – FRS 102, Financial Reporting Standard applicable in the UK and Ireland - is less than a month away for companies with a 31 December year end. For those affected, one of the trickiest aspects of the transition process will be the move to new International Financial Reporting Standards (IFRS) based rules on accounting for financial instruments.

If you think you don’t have any financial instruments, and that this is only going to affect banks and insurance companies, think again. You can enter the IFRS tax transition maze with just a variable rate borrowing hedged with a simple fixed/floating interest rate swap.

Can we find a way through the maze which avoids being taxed on the inherent volatility that might arise if we must account for financial instruments at fair value?