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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Accounting for corporate finance: International Financial Reporting Standards: overview

Overview of International Accounting Standards

The relevant International Accounting Standards relating to financial instruments are IAS 32 (‘Financial Instruments: Presentation’), IAS 39 (‘Financial Instruments: Recognition and Measurement’), and IFRS 7 (‘Financial Instruments: Disclosures’). Accounting for financial statements is one of the most complex and controversial areas in accounting. It is an area that has seen many changes and one which is still evolving.

IAS 39 is in the process of being replaced by IFRS 9. This process may lead to significant changes to accounting for corporate finance transactions. The guidance in this manual will be updated once revised standards have been finalised and are available for adoption in the UK.

This section of the guidance is focused on the classification and measurement requirements of IAS 39.

IAS 32 sets out the requirements for the presentation of financial instruments. Detailed guidance on IAS 32 is at CFM21200+.

The detailed provisions on derivatives (CFM24000+), hybrid debt (CFM25000+) and hedging (CFM27000+) are separately addressed in the dedicated guidance to those subjects.

Note that the guidance on IAS 32 and IAS 39 will also apply to those companies which apply FRS 25 and FRS 26 in their accounts under Old UK GAAP (CFM21507).