by François Masquelier, Chairman of ATEL
The ten years of IAS 39 have changed our lives as treasury managers. We have been involved with and using ‘hedge accounting’ for so many years that we have almost forgotten the days of local GAAP that went before it. In this article, we want to make some comments on the future IFRS 9 but also put together some of the thoughts of practitioners, treasury managers and academics on this financial instrument accounting standard that has revolutionised the way we carry out treasury management.
IAS 39 has changed our lives
Whatever IFRS 9 may come up with when its final and definitive version is released – expected in the second half of 2011 - no treasury manager can claim that IAS 39 has not changed his work and his methods of managing risk and using derivatives. As a natural optimist, I would even be tempted to talk of celebration rather than commemoration. IAS 39 has, in one way or another, changed all our lives as treasury managers, bankers or service providers (and not always for the good, some critics among us might say). Let’s think back to what we did before January 2001 and the type of derivative products that we dealt in then. Our derivative instrument portfolios have been considerably simplified and the most structured and most leveraged products have become fewer. We have become real mini-accountants and financial reporting specialists (see IAS 32 - IFRS 7). Could IAS 39 have perhaps brought us closer to operational activities and made us speak to the accountants more than we used to? In any case, no one can claim that IAS 39 has not had a major effect on our profession and our suppliers!