Financial instruments - Amendments to IAS 39

In December 2004 the IASB made a minor amendment to IAS 39 relating to transition and day one profit recognition, and in April 2005 a further amendment relating to cash flow hedging of forecast intragroup transactions was made. Further amendments to the standard are under consideration by the IASB, including restrictions to the fair value option, and in relation to credit derivatives and financial guarantees, which may be issued in the second quarter of 2005. The ASB issued as FRED 30 Third Supplement the IASB exposure drafts preceding these amendments, and will consider the issue of a single 'omnibus' amendment to FRS 26 in due course reflecting the changes made by the IASB.

Financial instrument disclosures

In July 2004 the IASB issued an exposure draft ED 7 'Financial Instruments: Disclosures', proposing substantial revisions to the disclosure requirements of IAS 32. These proposals were also issued by the ASB as FRED 33. A final standard is expected to be issued this summer, effective for accounting periods commencing on or after 1 January 2007, but with earlier adoption permitted. The UK standard would replace FRS 25, and thus be applicable to entities applying FRS 26. However, if the ASB defers the effective date of the extension of scope of FRS 26, it may nevertheless decide that some of the new disclosure requirements should apply to all entities from 2007 and not just to those entities within the scope of FRS 26.