Revenue papers discuss changes to IAS 39

HMRC have issued two discussion papers on the effect on the tax rules on loan relationships and derivative contracts arising from proposed amendments to International Accounting Standard (IAS) 39.

Discussion paper 1 considers the amendments to the corporation tax rules on loan relationships and derivative contracts arising from the introduction of International Financial Reporting Standard (IFRS) 9 to replace IAS 39.

The first changes considered are those relating to the classification and measurement of financial instruments following the introduction of IFRS 9. These are considered under the headings of hybrid instruments, AFS assets, and other issues.

Discussion paper 2 looks at whether, in the light of IFRS 9 and likely future changes to accounting standards for financial instruments, there should be more systematic statutory provision to deal with cases where the carrying value, or deemed carrying value, of a loan relationship changes between the end of one accounting period and the beginning of the next.

Although this paper concentrates on loan relationships, it is likely that any statutory changes made to CTA 2009, part 5 would be paralleled in the part 7 derivative contracts rules.

Comments on the points raised in these discussion papers should be emailed to Sue Davies or Tony Sadler no later than 4 June.

Issue: 4255 / Categories: News