• 2023 Issued Standards – IFRIC 16
  The IFRIC Interpretations are available in the 2023 Issued Standards, which include all amendments issued up to and including 1 January 2023.

Registration is required to access the free version of the Issued Standards. This version does not include additional documents that accompany the full standards (such as illustrative examples, implementation guidance and basis for conclusions).

IFRIC 16 provides guidance on three main issues:

1. Foreign currency risk
   A parent company may designate as a hedged risk only those exchange differences which arise from a foreign operation using a different functional currency from its own. The presentation currency does not expose an entity to risks which may be hedged.
2. Hedging instrument
   The hedging instrument in a hedge of a net investment in a foreign operation may be held by any entity or entities within the group.
3. Reclassification adjustments on disposal of the investment
   IFRIC 16 requires that IAS 21 should be applied to determine the amount which is reclassified to profit or loss in respect of the hedged item and IFRS 9 must be applied to determine the amount in respect of the hedging instrument.