Cautious corporate approach to IAS 39

"Under IAS 39, more plain vanilla derivatives will be executed since they are more likely to qualify for hedge accounting than more complex derivatives," she said.

Bailey warned that there could also be P&L mismatches. "All derivatives, including hedges, will be carried at fair value in the balance sheet," she added. "If hedge accounting is not achieved, the derivative is marked-to-market and the hedged item, for example an issuance of debt, is not."

However, she said that if hedge accounting is

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