14 April 2020To:
Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON IASB EXPOSURE DRAFTED/2020/1 Interest Rate Benchmark Reform – Phase 2Proposed Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16Comments to be received by 8 May 2020The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute ofCertified Public Accountants (Institute) is seeking comments on the IASB Exposure DraftED/2020/1. The Exposure Draft is available on the Institute's website:
http://www.hkicpa.org.hk/en/standards-and-regulations/standards/financial-reporting/exposure-drafts/The International Accounting Standards Board (IASB) has been considering the effects ofinterest rate benchmark reform on financial reporting since 2018, splitting its work into twophases. The first phase culminated in amendments to some IFRS Standards in September2019, providing temporary exceptions to specific hedge accounting requirements andrequiring related disclosures in the period during which there is uncertainty aboutcontractual cash flows arising from interest rate benchmark reform.The IASB has now published further proposed amendments as part of the second phaseof its project. These proposed amendments aim to address issues affecting financialstatements when changes are made to contractual cash flows and hedging relationshipsas a result of the reform. Given the extensive use of interest rate benchmarks in globalfinancial markets, the proposed amendments are expected to affect many entities.The main proposed amendments relate to:
• modifications—a company would not derecognise or adjust the carrying amount offinancial instruments for modifications required by interest rate benchmark reform, butwould instead update the effective interest rate to reflect the change in the interest ratebenchmark;
• hedge accounting—a company would not discontinue its hedge accounting solelybecause of replacing the interest rate benchmark if the hedge meets other hedgeaccounting criteria; and• disclosures—a company would disclose information about new risks arising from theinterest rate benchmark reform and how it manages the transition to alternativebenchmark rates.The FRSC invites your comments on the proposal as set out in the ED by 8 May 2020 toallow your comments to be considered in developing its response to the IASB. Commentsshould be supported by specific reasoning and should be submitted in written form.Comments may be sent by mail, fax or e-mail to:
Standard Setting DepartmentHong Kong Institute of Certified Public Accountants37th Floor, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax number (+852) 2865 6776E-mail: commentletters@hkicpa.org.hkComments will be acknowledged and may be made available for public review unlessotherwise requested by the respondent.
Invitation to Comment on IASB Exposure Draft ED/2020/1 Interest Rate Benchmark Reform – Phase 2: Proposed Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
下载原件14 April 2020To:
Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON IASB EXPOSURE DRAFTED/2020/1 Interest Rate Benchmark Reform – Phase 2Proposed Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16Comments to be received by 8 May 2020The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute ofCertified Public Accountants (Institute) is seeking comments on the IASB Exposure DraftED/2020/1. The Exposure Draft is available on the Institute's website:
http://www.hkicpa.org.hk/en/standards-and-regulations/standards/financial-reporting/exposure-drafts/The International Accounting Standards Board (IASB) has been considering the effects ofinterest rate benchmark reform on financial reporting since 2018, splitting its work into twophases. The first phase culminated in amendments to some IFRS Standards in September2019, providing temporary exceptions to specific hedge accounting requirements andrequiring related disclosures in the period during which there is uncertainty aboutcontractual cash flows arising from interest rate benchmark reform.The IASB has now published further proposed amendments as part of the second phaseof its project. These proposed amendments aim to address issues affecting financialstatements when changes are made to contractual cash flows and hedging relationshipsas a result of the reform. Given the extensive use of interest rate benchmarks in globalfinancial markets, the proposed amendments are expected to affect many entities.The main proposed amendments relate to:
• modifications—a company would not derecognise or adjust the carrying amount offinancial instruments for modifications required by interest rate benchmark reform, butwould instead update the effective interest rate to reflect the change in the interest ratebenchmark;
• hedge accounting—a company would not discontinue its hedge accounting solelybecause of replacing the interest rate benchmark if the hedge meets other hedgeaccounting criteria; and• disclosures—a company would disclose information about new risks arising from theinterest rate benchmark reform and how it manages the transition to alternativebenchmark rates.The FRSC invites your comments on the proposal as set out in the ED by 8 May 2020 toallow your comments to be considered in developing its response to the IASB. Commentsshould be supported by specific reasoning and should be submitted in written form.Comments may be sent by mail, fax or e-mail to:
Standard Setting DepartmentHong Kong Institute of Certified Public Accountants37th Floor, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax number (+852) 2865 6776E-mail: commentletters@hkicpa.org.hkComments will be acknowledged and may be made available for public review unlessotherwise requested by the respondent.