AASB 9 Hedge Accounting Standard – Are you Prepared? These new rules will become mandatory for accounting periods starting on or after 1 January 2018 but Australian companies can early adopt these rules at any time between now and that date. The rules in AASB 9 are far simpler aasb 139 hedging forex better reflect the economic practicalities of hedging and risk management.
It is very likely the time for those entities that have steered clear of hedging because of AASB 139 to revisit the option. For those companies that have procedures in place to comply with AASB 139 rules, it may well be advantageous to move to the simplified rules early. There is a window of opportunity to early adopt AASB 9 before 30 June 2015 to take advantage of the benefits of the less onerous hedge accounting requirements without also adopting the more complex new loan credit loss provisioning requirements. If you would like to find out more please contact david.
This article needs additional citations for verification. What hedge accounting options are available to an entity that wants to manage foreign currency exposure? All entities are exposed to some form of market risk. For example, gold mines are exposed to the price of gold, airlines to the price of jet fuel, borrowers to interest rates, and importers and exporters to exchange rate risks. IAS39 requires that all derivatives are marked-to-market with changes in the mark-to-market being taken to the profit and loss account.