PracticeAuditASB confused by amended IAS39

ASB confused by amended IAS39

The UK Accounting Standards Board has finally issued its guidance to companies on the use of financial instruments standard IAS39, but warned there are still great uncertainties over the status of the EC's carved-out version.

Link: European Commission adopts IAS39

The guidance released late last week urges companies to follow the International Accounting Standards Board’s unamended version of IAS39 in areas such as hedge accounting, but said that complications arise when it comes to the fair valuing of financial liabilities and transitional arrangements.

In fact, when it comes to exemptions in IFRS1 on first time adoption, the ASB said it was unsure if the EC’s statement that those using the carved-out IAS39 can take advantage of the relief provisions is true. Consequently, it advised companies to avoid any uncertainty by complying from the outset with both the amended and unamended versions of the standard.

‘We set out to give simple and straightforward advice on the carved out IAS39,’ said ASB chairman Ian Mackintosh. ‘Unfortunately, we have found the situation to be complicated and sometimes unclear. Consequently, our guidance is much more lengthy and inconclusive than we hoped, and will need to be studied carefully by preparers.’

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