Document ID: chunk:federal_register_of_legislation:F2021C00192:body:0:p17
Version: federal_register_of_legislation:F2021C00192
Segment Type: other
Provision Reference: 
Character Range: 41661–44600

hedged item, or a combination of financial instruments as the hedging instrument, an entity shall prospectively cease applying paragraphs 102D–102G to an individual item or financial instrument in accordance with paragraphs 102J, 102K, 102L, or 102M, as relevant, when the uncertainty arising from interest rate benchmark reform is no longer present with respect to the hedged risk and/or the timing and the amount of the interest rate benchmark-based cash flows of that item or financial instrument.
102O An entity shall prospectively cease applying paragraphs 102H and 102I at the earlier of:
(a) when changes required by interest rate benchmark reform are made to the non-contractually specified risk portion applying paragraph 102P; or
(b) when the hedging relationship in which the non-contractually specified risk portion is designated is discontinued.

Additional temporary exceptions arising from interest rate benchmark reform

Hedge accounting
102P As and when the requirements in paragraphs 102D–102I cease to apply to a hedging relationship (see paragraphs 102J–102O), an entity shall amend the formal designation of that hedging relationship as previously documented to reflect the changes required by interest rate benchmark reform, ie the changes are consistent with the requirements in paragraphs 5.4.6–5.4.8 of AASB 9. In this context, the hedge designation shall be amended only to make one or more of these changes:
(a) designating an alternative benchmark rate (contractually or non-contractually specified) as a hedged risk;
(b) amending the description of the hedged item, including the description of the designated portion of the cash flows or fair value being hedged;
(c) amending the description of the hedging instrument; or
(d) amending the description of how the entity will assess hedge effectiveness.
102Q An entity also shall apply the requirement in paragraph 102P(c) if these three conditions are met:
(a) the entity makes a change required by interest rate benchmark reform using an approach other than changing the basis for determining the contractual cash flows of the hedging instrument (as described in paragraph 5.4.6 of AASB 9);
(b) the original hedging instrument is not derecognised; and
(c) the chosen approach is economically equivalent to changing the basis for determining the contractual cash flows of the original hedging instrument (as described in paragraphs 5.4.7 and 5.4.8 of AASB 9).
102R The requirements in paragraphs 102D–102I may cease to apply at different times. Therefore, applying paragraph 102P, an entity may be required to amend the formal designation of its hedging relationships at different times, or may be required to amend the formal designation of a hedging relationship more than once. When, and only when, such a change is made to the hedge designation, an entity shall apply paragraphs 102V–102Z2 as applicable. An entity also shall apply paragraph 89 (for a fair