Certain surrender options are exempt from the application of IAS 39 and therefore are not required to be separated. These include surrender options where the surrender value is: • specified in a schedule, not indexed and not accumulating interest; • based on a principal amount and a fixed or variable interest rate (or based on the fair value of a pool of interest bearing securities), possibly less a surrender charge. However, if the surrender value varies in response to the changes in a financial variable or a non–financial variable that is not specific to a party to the contract, this exemption would not apply. If the surrender value is already.
