The IIF submitted a comment letter to the International Accounting Standards Board (IASB) Exposure Draft ED/2020/1 Interest Rate Benchmark Reform—Phase 2. Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16.
In the letter, the IIF expresses its support on behalf of its member firms to the IASB’s two-phase project on the implications of the IBOR reform on financial reporting. The IIF also appreciates how quickly the IASB addressed concerns related to issues arising when interest rate benchmarks are replaced. In particular, the IIF appreciates that concerns it raised in its comment letter for the IASB’s Phase 1 proposals around pre-replacement issues are reflected in the Phase 2 proposals set out in the Exposure Draft.
While IIF member firms are supportive of the proposals in the Exposure Draft, they provide feedback and suggestions to several proposals in the response letter, and in some cases ask for further clarification. For instance, members raised concerns about the different rates and scales at which the benchmark rate reforms are progressing and the expectation that a significant number of entities will be operating in multi-rate environments.