The IASB proposes improvements to derecognition requirements. The proposals will amend IAS 39, Financial Instruments: ecognition and Measurement, and IFRS 7, Financial Instruments: Disclosures. Derecognition is when an entity removes a inancial instrument from its financial statements. This occurs if the entity no longer controls a financial asset or no longer as an obligation to settle a financial liability.

The IASB is also proposing to enhance disclosure requirements, especially in situations where an entity continues to have an ongoing involvement in a financial asset that would be derecognized under the proposals. The additional disclosures ould allow users to make a better assessment of the risks associated with such an asset.

The proposals are part of the IASB’s comprehensive review of off balance sheet activities and follow the publication of proposals in December 2008 to strengthen and improve the requirements for identifying which entities a company controls, known as consolidation.

The use of special structures by reporting entities, particularly banks, to manage securitizations and other complex financial arrangements was highlighted as a matter of concern by the G20 leaders at their meeting in November 2008. The IASB’s comprehensive review of off balance sheet risk is a response to that concern.

The FRSC invites comments on the exposure draft by 15 July 2009 to enable the Council to consider and include comments from Philippine respondents in its response to the IASB. Comments may be sent by e-mail to picpaadm@pldtdsl.net, or by mail, addressed to: