Companies should undertake a review of their current risk management and hedge accounting policies to highlight how the proposed changes will impact these policies given the new IFRS 9 requirement. The proposed rules can operate on three core levels.

Since FAS 133 was introduced nearly a decade ago and IAS 39 was introduced over five years ago, we continue to see differing interpretations of these standards being applied in the marketplace. A good example of this is the application of currency basis on Cross Currency Interest Rate Swaps (“CCIRS”) for effectiveness testing.