The European Financial Reporting Advisory Group (EFRAG) has published its proposed endorsement advice to the European Commission on IAS32 and IAS39, the accounting standards for financial instruments. Due to affect hedge accounting, among other things, the standards will influence the day to day workings of corporate treasury departments across Europe.
The EFRAG has unanimously endorsed IAS32 though recorded six dissenting votes for IAS39; issues on hedge accounting and demand deposits are apparently proving controversial. All the members agree that derivatives should be accountable at fair value though dissenters suggest an exception should exist where derivatives are used in connection with an effective hedge.
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