The IASB's exposure draft issued in September 2012 changes the focus of hedge accounting away from stringent rules to a more principles based approach which seeks to align accounting with companies’ risk management policies.
Overall this change in approach brings with it new hedge accounting opportunities due to a relaxation in the qualifying criteria for hedged items and hedging instruments and the risks that can be hedged. It is anticipated that a number of economic hedge arrangements that failed to meet hedge accounting criteria under IAS 39 would be acceptable under the proposals in the exposure draft.
The IASB has split the hedge accounting phase into two parts: general hedging and macro hedging. It finalised its deliberations on the general hedge accounting requirements in April 2013 and is working towards issuing a final standard in the third quarter of 2013. A discussion paper on macro hedge accounting is also expected in the third quarter of 2013.
In June 2013, the IASB published amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting. These amendments provide relief from discontinuing an existing hedging relationship when a novation (e.g. to a clearing counterparty), that was not contemplated in the original hedging documentation, meets specific criteria. The IASB plans to include similar requirements in its forthcoming standard on general hedge accounting.