IASB Proposes Improvements to Derecognition Requirements

NEW YORK- The International Accounting Standards Board (IASB) published on March 31, 2009 for public comment an exposure draft of proposals to improve the derecognition requirements for financial instruments. ?

The IASB is also proposing to enhance disclosure requirements, especially in situations where an entity continues to have an ongoing involvement in a financial asset that would be derecognized under the proposals. The additional disclosures would allow users to make a better assessment of the risks associated with such an asset.

The proposals are part of the IASB?s comprehensive review of off balance sheet activities and follow the publication of proposals in December 2008 to strengthen and improve the requirements for identifying which entities a company controls, known as consolidation.

The use of special structures by reporting entities, particularly banks, to manage securitizations and other complex financial arrangements was highlighted as a matter of concern by the G20 leaders at their meeting in Washington, DC, in November 2008. The IASB?s comprehensive review of off balance sheet risk is a response to that concern.

The IASB intends to hold public round tables to seek wider views on it?s derecognition and consolidation proposals and to broaden understanding of the interaction between the two projects. The IASB and the US Financial Accounting Standards Board (FASB) have already announced their intention that these will become joint projects once the FASB has completed short-term amendments to its existing standards.


The IASB invites comments on the exposure draft by 31 July 2009. The exposure draft is available on the ?Open for Comment? section on www.iasb.org

IASB is committed to developing in the public interest a single set of high quality global accounting standards.

For more information please visit the following website: www.iasb.org