IASB and banks on the brink of deal
European banks and the international accounting regulator have set aside their major differences on financial reporting rules on derivatives.
Banks hopeful of derivatives deal with IASB
After two intensive months of negotiations the International Accounting Standards Board agreed to amend some rules, and to consider further changes in the autumn. A final agreement has not yet been reached.
The European Banking Federation said discussions are ongoing about bankers’ risk management practices.
The IASB has yielded to opposition against reporting derivatives at fair or market values. The agreement will allow a hedge accounting regime that combines the assets and liabilities of derivatives.
Hedge accounting is essential for banks as it allow them to defer putting derivative gains and losses through their profit and loss account.