Beyond the GAAP no.74 - January 2014

November 2013 saw the publication of the final standard on hedge accounting that constitutes
phase 3 of IFRS 9, and which is explained in full detail in this issue of Beyond the GAAP. This standard represents a significant new direction for IFRSs, with a greater focus on entities’ operational risk management policy. From now on, the accounting treatment must be adapted to fit the management policy, rather than the other way around. This is the first step towards a “business model” approach that many have called for, and that is currently being discussed as part of the Conceptual Framework project.

In addition, the IASB launched a Post-Implementation Review to gather information on the relevance and usefulness of the financial information resulting from application of IFRS 3 - Business Combinations. Stakeholders are asked for their opinion on separate recognition of intangible assets at fair value, recognition of noncontrolling interests, step acquisitions and partial disposals, among other things. However, it is not yet known how the information gathered will be used, as IFRS 3 is a US GAAP converged standard.