Reasons for revamping hedge accounting by IASB

What prompted the hedge accounting standard to be revamped by IASB?

The main reason for revamping the accounting standards relating to financial instruments by the IASB is the direct outcome of the shock that sent shivers through the spine of several conglomerates as a fall out of the financial crisis during the year 2008. It is perceived that the accounting standards issued by the IASB are more principle based as opposed to the accounting standards issued by the Financial Accounting Standards Board (FASB) which is considered to be rule based. Nevertheless it was widely felt that certain requirements relating to hedge accounting were rule based severely crippling the practical utility of implementing the scheme of hedge accounting as envisaged by the standards. The IASB along with the FASB undertook a major overhaul of the hedge accounting piece resulting in the announcement of a completely revamped set of standards relating to hedge accounting.