FRSC Issues for Comment Proposed Amendments to Interpretations

The Financial Reporting Standards Council (FRSC) has issued an Invitation to Comment on proposals to amend IFRIC 9, Reassessment of Embedded Derivatives, and IFRIC 16, Hedges of a Net Investment in a Foreign Operation, issued by the International Accounting Standards Board (IASB). The proposals are set out in an exposure draft Post-implementation Revisions to IFRIC Interpretations.

The proposed amendment to IFRIC 9 is a consequential amendment that became necessary as a result of the changed definition of a business combination in IFRS 3 issued in January 2008. The Board proposes to exclude embedded derivatives in contracts acquired in combinations of entities or business entities under common control and in the formation of joint ventures from the scope of the Interpretation.

To eliminate an impediment for users, the amendment to IFRIC 16 proposes to remove the restriction on the entity that can hold hedging instruments.

The exposure draft is a short document proposing urgent but relatively narrow amendments for which the IASB believes that there is likely to be a broad consensus. Therefore, the IASB approved a 30-day comment period. The IASB invites comments by 2 March 2009. Due to the short comment period, comments may be sent electronically to the IASB at www.iasb.org.

The FRSC Invitation to Comment and the IASB exposure draft may be downloaded from the Philippine Financial Reporting Standards (PFRS) website, within the PICPA website at www.picpa.com.ph. The exposure draft may also be downloaded from the IASB website at www.iasb.org.