IFRS expert David Cairns provides
a round-up of the key changes in international accounting standards
and developments at the International Accounting Standards Board
IASB
Hedge accounting
The International Accounting Standards Board (IASB) has issued
an amendment to IAS 39, Financial Instruments:
Recognition and Measurement, which provides application guidance
on:
The amendment clarifies that the intrinsic value, but not the
time value, of an option reflects a one-sided risk. If an entity designates
an option in its entirety as a hedge of a one-sided risk, hedge ineffectiveness
will arise. However, an entity may improve hedge effectiveness by
designating only the intrinsic value as a hedge of a one-sided risk.
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