| EFRAG will conduct a joint field-test of the revised IASB proposals on general hedge accounting. The Review Draft on general hedge accounting, which is expected to be released by the IASB during April 2012, will introduce significant changes to the current general hedge accounting requirements. The main purposes of the field-test are to test the operationality of the proposals, whether the standard will operate as intended, and gather information to assess the quality and effects of the future accounting standard and the usefulness of the information that will result from applying the requirements, as well as to assess the level of effort required to implement and apply the requirements.
This field-test is conducted by EFRAG in partnership with National Standard Setters in Europe who are interested in participating in the study. ANC, ASB, ASCG and the OIC have already agreed to participate.
What is field-testing and what are participants expected to do?
The field-test involves testing the proposals by applying them to actual transactions. Participants will be asked to select a number of hedges for testing, apply the full set of proposals to that sample and to report any issues that they experience.
EFRAG is also interested in identifying any topics or areas in which participants believe there is a lack of clarity in the drafting that could result in accounting that does not reflect the entity’s risk management activities.
When and how will the field test be conducted?
EFRAG staff has developed jointly with the National Standard Setters, that have agreed to participate, a questionnaire on the new proposals. Using a sample of hedges selected for testing, participants will be asked to complete a questionnaire to document their findings. Based on the completed questionnaires, EFRAG staff and the standard setters will conduct, when necessary, follow-up interviews with participants either by telephone or face-to-face.
The information provided during the field-test to EFRAG and the European National Standard Setters participating in the field-test will remain confidential. Information used in any reports will be presented in such a way that no individual company or person will be able to be identified. However, the list of participants in the field-test will be made public. The IASB will have access to the information.
If you are interested in obtaining a better understanding on how this joint field-test will work, please refer to the document linked to below on the EFRAG website which provides supplementary information.
Would you like to participate?
Now that the IASB’s redeliberations have been completed, the field-test offers preparers an opportunity to test the forthcoming proposals on general hedge accounting and to provide valuable input to the EU endorsement process.
If you would like to participate in the field-test, please contact your designated point of contact (as indivcated on the page linked to from below) for detailed information about your participation by 30 April.
For further details on this field test please see the EFRAG website here