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IFRS® Accounting Standards

Interest Rate Benchmark Reform – Phase 2

Summary

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to consider the financial reporting implications of interest rate benchmark reform.

In September 2019, the IASB completed the Phase 1 of the project to address the pre-replacement issues of the reform.

The IBOR Reform and its Effects on Financial Reporting—Phase 2 project focuses on issues that might affect financial reporting when an existing interest rate benchmark is replaced with an alternative benchmark (replacement issues). Specifically, the proposed amendments address replacement issues associated with modification of financial assets and financial liabilities, including lease liabilities, hedge accounting and reform-related disclosures.

Staff Contact(s)

Katharine Christopoulos, CPA, CA Director, Accounting Standards Board

Project Status

  • Information gathering

    Completed prior to June 2018

  • Approving project

    The IASB added the project to its research agenda in June 2018

  • Engaging Communities

    IASB Exposure Draft issued in April 2020

    AcSB Exposure Draft issued in April 2020

  • Deliberating feedback

    The IASB and the AcSB are deliberating comments on their Exposure Drafts

    The IASB is expected to issue final amendments in August 2020

  • Final pronouncement

    The IASB issued the final amendments in August 2020

    The AcSB completed its endorsement process and incorporated the amendments into Canadian GAAP in October 2020

AcSB Response Letter

Read the AcSB’s response letter to the IASB’s Exposure Draft, Interest Rate Benchmark Reform – Phase 2 (Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16).

News


September 4, 2020

International Activity

IASB completes IBOR reform project with amendments to IFRS Standards

The IASB has completed its project on IBOR reform by issuing a package of amendments to IFRS Standards in August 2020. These amendments are effective on January 1, 2021, with early adoption permitted. The AcSB will ballot the final amendments and complete its endorsement process in September 2020.

June 10, 2020

International Activity

AcSB Response – Interest Rate Benchmark Reform Exposure Draft

On May 25, 2020, the AcSB responded to the IASB Exposure Draft, Interest Rate Benchmark Reform—Phase 2 (Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16). In its response letter, the AcSB supported the relief provided by the IASB and encouraged the IASB to provide more context and guidance on how the term “economically equivalent” will be applied in practice. Read our letter for more context of the matters we raised to the IASB for further consideration.

April 17, 2020

Document for Comment

AcSB Exposure Draft – Interest Rate Benchmark Reform – Phase 2

The AcSB has issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by May 25, 2020.

April 9, 2020

International Activity

IASB Exposure Draft – Interest Rate Benchmark Reform – Phase 2

What are the accounting implications when a IBOR-based benchmark is replaced? The IASB has issued an Exposure Draft relating to Phase 2 of the Interest Rate Benchmark Reform project focused on replacement issues. Canadian stakeholders are encouraged to submit their comments to the IASB by May 25, 2020.

Meeting & event summaries


May 13, 2020

AcSB Decision Summary – May 13, 2020

The AcSB discussed the initial feedback received from stakeholders on the International Accounting Standards Board’s (IASB) Exposure Draft, “Interest Rate Benchmark Reform – Phase 2.” The Board also discussed the key points to raise in its response letter to the Exposure Draft that will be sent to the IASB by the May 25, 2020, deadline.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal voting process.