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MASB published ‘Interest Rate Benchmark Reform’ (31 October 2019)

The Malaysian Accounting Standards Board (Board) has today issued Interest Rate Benchmark Reform (Amendments to MFRS 9 Financial Instruments, MFRS 139 Financial Instruments: Recognition and Measurement and MFRS 7 Financial Instruments: Disclosures).

The amendments are word-for-word Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) issued by the International Accounting Standards Board.

The “Notice of Issuance” can be downloaded here.

ABOUT THE PRONOUNCEMENT

Interest Rate Benchmark Reform (Amendments to MFRS 9 Financial Instruments, MFRS 139 Financial Instruments: Recognition and Measurement and MFRS 7 Financial Instruments: Disclosures)

The Interest Rate Benchmark Reform amends some specific hedge accounting requirements to provide relief from potential effects of the uncertainty caused by the IBOR reform. In applying the amendments, companies would continue to apply those hedge accounting requirements assuming that the interest rate benchmark associated with the hedged item, hedged risk and/or hedging instrument are based is not altered as a result of the interest rate benchmark reform. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties.

Applying the amendments, companies are not required to apply the MFRS 139 retrospective assessment, but continue to apply hedge accounting to a hedging relationship for which effectiveness is outside of the 80– 125% range during the period of uncertainty arising from the reform.

The amendments shall apply to financial statements of annual periods beginning on or after 1 January 2020. Earlier application is permitted.

END 

For enquiries, please contact: 

Malaysian Accounting Standards Board

Unit 13A-1, Menara MBMR,
No. 1, Jalan Syed Putra,
58000 Kuala Lumpur.

Tel: 03-2273 3100

Fax: 03-2273 9400

Email: technical@masb.org.my