Can Member States either permit or require companies to apply the full version of IAS 39 in respect of the hedge accounting carve-out?
Yes. The hedge accounting carve-out relates essentially to the manner in which hedge effectiveness is applied. Since the EU Accounting Directives do not contain provisions on hedge accounting, Member States may therefore require companies to comply fully with the hedge accounting provisions of IAS 39, including those that have been carved out. In doing so, Member States should take account of the reasons for this carve out – namely, to address concerns particularly of those banks that are operating in a fixed interest rate environment. Member States may only act in this way as long as the Commission has not adopted a revised standard covering these issues or has not explicitly rejected its adoption on the basis of the criteria in Article 3 (2) of the IAS Regulation such as going against “the true and fair view principle”. As the carve-out has been decided only on procedural grounds awaiting future improvements of IAS 39, Member States are entitled to require companies to apply the full
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