The hot topic this year in corporate treasuries is International Financial Reporting Standard (IFRS) 9, which addresses the accounting for financial instruments. IFRS 9 will require financial assets to be measured at amortised cost or fair value.

IFRS 9 was promulgated by the International Accounting Standards Board (IASB). It contains three main topics: classification and measurement of financial instruments, impairment of financial assets and hedge accounting.

The four specific areas that affect us in the treasury sector are:

  • Time value for FX and Interest Rate Options
  • Currency basis on Cross Currency Interest Rate Swaps
  • Hedging of Commodity Risk
  • Derivatives as hedged items

The first area we’ve been working on is Management and Risk Reports, which largely based on earlier IAS 39 material.