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Comments from ACCA
January 2008

ACCA is pleased to have this opportunity to comment on the exposure draft (ED) ‘Amendments to FRS26’. The ED was considered by ACCA’s Financial Reporting Committee.

We attach a copy of the letter that we have sent to IASB in response to their proposals.

Our responses to the additional questions raised in the ED are as follows:

Q1 Are you aware of any issues that would affect those UK entities that will be required to implement the proposals outlined in this exposure draft?

As stated in our response to question 3 of the IASB’s invitation to comment, we do not consider that the proposed amendments to what can be designated a hedge item will have significant change on existing practice in the UK, other than for those entities which in respect of hedging one-sided risk with options that inferred the time value of the option in the hedged item.

Q2 Do you agree that the benefits of the proposals in the exposure draft would outweigh any additional costs involved? If not, why not?

Any significant costs that might be occurred would be system related, where a change in existing practice might result from the proposals, such as the restriction to hedging one-sided risks with options. However these are likely to be one-off costs, with much of the information required being readily available. Moreover, we believe the benefits of ending divergent practices would in any case outweigh any such costs in the long run.

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