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      Highlights

      – What feedback is the IASB seeking?

      – What are its specific areas of interest?

      – What’s next?

      To understand whether they are delivering their intended outcomes, the International Accounting Standards Board (IASB) is reviewing the hedge accounting requirements in IFRS 9 Financial Instruments and the related disclosures in IFRS 7 Financial Instruments: Disclosures.

      Mahesh Narayanasami

      Partner

      KPMG in the U.S.

      Hedge accounting under IFRS 9 was largely designed to better align accounting outcomes with a company’s risk management activities. However, some aspects may be operationally complex, and some disclosure requirements can be challenging to implement, so this may be an opportunity to seek additional clarification.

      Mahesh Narayanasami,

      Partner, Global IFRS Financial Instruments Standards Leader

      What feedback is the IASB seeking?

      The IASB seeks views on:

      • whether hedge accounting under IFRS 9 and the related disclosures in IFRS 7 are meeting their objectives; and
      • the ongoing costs and benefits of applying the requirements.

      What are its specific areas of interest?

      The IASB is seeking specific feedback on the following areas.

      AreaIASB’s focus

      Potential areas of operational complexity, including:

      • the requirement that forecast transactions should be ‘highly probable’;
      • the cost of hedging approach;
      • the rebalancing of hedging relationships; and
      • cash flow hedge basis adjustments to the carrying amount of a non-financial item.
      		Whether the requirements provide a clear basis to apply them appropriately, make appropriate judgements and apply them consistently.
      DisclosuresWhether the hedge accounting disclosures provide useful information, the requirements are clear, and whether users would benefit from additional disclosures.  

      Transition requirements

      		Whether companies’ experience of transitioning to IFRS 9 suggests any improvements the IASB could make to transition requirements in future standard-setting projects, including the timing and manner of withdrawing hedge accounting under IAS 39 Financial Instruments: Recognition and Measurement in light of progress on the risk mitigation accounting project. 

      What’s next?

      Take this opportunity to share your feedback with the IASB on its focus areas and any other concerns you may have by 26 January 2027.

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