The IASB has invited comment on an exposure draft of proposals to improve the IAS 39 requirements for derecognition of financial instruments.
Derecognition means removing a financial instrument from an entity's financial statements. This occurs if the entity no longer controls a financial asset or no longer has an obligation to settle a financial liability.
The IASB is also proposing to enhance the disclosures currently in IFRS 7, especially in situations where an entity continues to have an ongoing involvement in a financial asset that would be derecognised under the proposals.
The derecognition exposure draft (ED/2009/3 Derecognition) is part of the IASB's comprehensive review of off-balance sheet activities; in December 2008, the IASB published ED 10 on Consolidation to tighten the requirements for identifying which entities a company controls, and therefore consolidates.
Comments on the derecognition exposure draft are due by 31 July 2009.