BC64 The Board considered and rejected suggestions for other exemptions. Each such exemption would have moved the IFRS away from a principle‑based approach, diminished transparency for users, decreased comparability over time within an entity’s first IFRS financial statements and created additional complexity. In the Board’s view, any cost savings generated would not have outweighed these disadvantages. Paragraphs BC65–BC73 discuss some of the specific suggestions the Board considered for embedded derivatives, hyperinflation, intangible assets and transaction costs on financial instruments.

Embedded derivatives

BC65 IAS 39 [The Board amended the requirements in IAS 39 to identify and separately account for embedded derivatives and relocated them to IFRS 9 Financial Instruments. This Basis for Conclusions has not been updated for changes in requirements since IFRIC 9 Reassessment of Embedded Derivatives was issued in March 2006.] requires an entity to account separately for some embedded derivatives at fair value. Some respondents to ED 1 argued that retrospective application of this requirement would be costly. Some suggested either an exemption from retrospective application of this requirement, or a requirement or option to use the fair value of the host instrument at the date of transition to IFRSs as its deemed cost at that date.