IASB makes concession on IAS39 hedge accounting rules

The International Accounting Standards Board (IASB) today issued an amendment to the hedge accounting provisions of IAS 39 Financial Instruments: Recognition and Measurement.

The IASB developed this amendment after constituents raised concerns that it was common risk management practice for entities to designate the foreign currency risk of a forecast intragroup transaction as the hedged item and that IAS 39 (as revised in 2003) did not permit hedge accounting for this.  Furthermore, IAS 39 (as revised in 2003) created a difference from US accounting requirements on this point.