The Interpretations Committee received a request to clarify: (‘Issue 1’) whether an entity (Entity A) should account for three transactions separately or aggregate and treat them as a single derivative; and (‘Issue 2’) how to apply paragraph B.6 of Guidance on Implementing IAS 39 Financial Instruments: Recognition and Measurement (‘IG B.6 of IAS 39’) in addressing Issue 1.
At its November 2013 meeting, the Interpretations Committee noted that in order to determine whether Entity A should aggregate and account for the three transactions above as a single derivative, reference may be made to paragraphs B.6 and C.6 of Guidance on Implementing IAS 39 and paragraph AG39 of IAS 32 Financial Instruments: Presentation.
The Interpretations Committee also discussed Issue 2, ie how to apply paragraph IG B.6 of IAS 39 in addressing Issue 1. The Interpretations Committee noted that application of the guidance in paragraph IG B.6 of IAS 39 requires judgement. It also noted that the indicators in IG B.6 of IAS 39 may assist an entity to determine the substance of the transactions, but that the presence or absence of any one specific indicator alone might not be conclusive.
The Interpretations Committee noted that providing additional guidance would result in the interpretations Committee attempting to specify the accounting for a specific transaction, and that this would not be appropriate.
On the basis of the analysis above, at its March 2014 meeting, the Interpretations Committee determined that, in the light of the existing IFRS requirements, neither an Interpretation nor an amendment to a Standard was necessary and decided not to add this issue to its agenda.