Dynamic Risk Management - International Accounting Standards Board
At its meeting on April 25, 2018, the Board discussed the application of qualifying criteria to the target profile, as well as designation of items within the target profile and the documentation requirements.
Regarding core demand deposits, the staff proposed that financial liabilities can be treated as demand deposits within the model when the following qualifying criteria are met: (i) they have a demand feature; and (ii) they will not reprice with a change in market interest rates.
The Board discussed how the dynamic nature of portfolios will affect both the asset and target profiles in the dynamic risk management accounting model. The Board also discussed how the dynamic nature of portfolios will affect the interaction between the asset and target profiles.
At future meetings, the staff plan to discuss derivative instruments used for dynamic risk management purposes and begin the discussions on performance assessment.
Review the IASB Update and podcast on the Board's Web site.