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08/11/2019 - EFRAG's feedback statement on its comment letter to IASB ED/2019/1 Interest Rate Benchmark Reform

EFRAG has published its feedback statement on its final comment letter to the IASB's ED2019/1 Interest Rate Benchmark Reform (Proposed amendments to IFRS 9 and IAS 39).

EFRAG's draft comment letter to the IASB's ED/2019/1 Interest Rate Benchmark Reform was published on 13 May 2019. Constituents on overall agreed with the draft comment letter and made the following comments:

  • They appreciated the IASB addressing the issues through the fast procedure and stressed the importance of swift endorsement of the Amendments in Europe as they need to be applied already in 2019.
  • They welcomed the EFRAG call to the IASB to address the issues in the second phase of the project as soon as possible and in parallel to the finalisation of the first phase.
  • They highlighted that the IASB should consider different fact patterns worldwide and not to focus only on LIBOR transition.
  • They would like the IASB to provide an assurance that the modification of a calculation methodology of a rate does not result in modification of that rate and hence of the underlying instrument.
  • Finally they considered it necessary that the IASB provides relief for the retrospective assessment of hedge effectiveness  under IAS 39 as soon as possible.

EFRAG's final comment letter was published on 20 June 2019. The feedback statement reflects how the above comments have been included in the final comment letter.

The feedback statement can be found here.