IASB completes response to IBOR reform with amendments to IFRS Standards

August 27, 2020

Phase 1 Before Reforms

Phase 1 focused on the accounting effects of uncertainty, in the period leading up to reform.

Phase 2 During Reforms

Phase 2 amendments address issues that might affect financial reporting during the reform of an interest rate benchmark, including effects of changes to contractual cash flows, or the effects on hedging relationships arising from the replacement of an interest rate benchmark with an alternative benchmark rate (replacement issues).

IASB amended requirements in IFRS 9, IAS 39, IFRS 7, IFRS 4 on insurance contracts and IFRS 16 on leases, relating to changes in the basis for determining contractual cash flows of financial assets, financial and lease liabilities, hedge accounting, and disclosures.

IFRS Standards Amendments

Issued a package of amendments to IFRS standards to help firm disclosure to investors with useful information on the effects of reform on those companies’ financial statements. Amendments complement 2019 changes and focus on effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate. Amendments in the final phase relate to changes that impact on contractual cash flows. A company need not derecognize/adjust the carrying amount of financial instruments for changes, but update the effective interest rate to reflect the change to an alternative benchmark. For hedge accounting, a firm need not discontinue hedge accounting because it makes changes required by the reform if the hedge meets other hedge accounting criteria. For disclosures, the company required to disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates.


Amendments are effective for annual reporting periods beginning on or after January 1, 2021. Early adoption of the changes is also permitted.

Related Information

IASB launched a consultation on the proposed IFRS taxonomy update 2020. Proposed amendments to reflect the new disclosure requirements introduced by the amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, issued in August 2020.

Consultation Effectiveness

Public Comments are requested by September 28, 2020.

For more information, visit www.ifrs.org

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