Accounting for Dynamic Risk Management: A Portfolio Revaluation Approach to Macro Hedging (Proposed amendments to IFRS 9) [ED]
|
Comment period ended on October 17, 2014. |
|
|
Next steps: |
The IASB will continue its discussion on the topics identified in the project plan. |
|
Last updated: |
October 2023 |
Overview
As part of its comprehensive response to the global financial crisis, the IASB is replacing IAS 39 with an entirely new financial instruments accounting Standard, known as IFRS 9, Financial Instruments. That project is in the final stages of completion. However, the IASB decided to treat as a separate project the macro hedging component of these reforms in order to elicit views from a broader range of constituents. The DP represents the first stage in this project, by seeking public comment on a possible approach to accounting for an entity’s dynamic risk management activities, namely the portfolio revaluation approach (PRA).
Under the PRA: (i) exposures that are risk-managed dynamically would be revalued for changes in the managed risk through profit or loss; (ii) fair value changes arising from risk management instruments that are used to manage this risk (derivatives) would also be recognized in profit or loss; (iii) the success of an entity’s dynamic risk management is captured by the net effect of the above measurements in profit or loss; and (iv) fair valuation of the risk exposures that are dynamically managed is not required.
The PRA also addresses the needs of users by providing a more comprehensive set of disclosures concerning an entity’s dynamic risk management activities.
Other developments
May 2023
On May 22, 2023, the IASB staff updated the work plan to indicate that the IASB plans to issue an exposure-draft in 2025.
March 2022
On March 28, 2022, the IASB staff updated the work plan to indicate that the IASB plans to decide the project direction in May 2022.
December 2021
On December 17, 2021, the IASB staff updated the work plan to indicate that the IASB plans to decide the project direction in Q2/2022.
November 2021
On November 23, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in Q1/2022.
June 2021
On June 24, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in the first half of 2022.
April 2021
On April 30, 2021, IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction (no specific date provided).
February 2021
On February 19, 2021, IASB staff updated the Work Plan to indicate that the Board plans to review the core model feedback in April 2021.
October 2020
On October 30, 2020, IASB staff updated the Work Plan to indicate that the Board plans to review the core model feedback in Q2/2021.
September 2020
On September 28, 2020, IASB staff updated the Work Plan to indicate that the Board plans to complete its core model outreach in October 2020.
May 2020
On May 21, 2020, IASB staff updated the Work Plan to indicate that the Board plans to complete its core model outreach in Q4/2020.
April 2020
On April 17, 2020, IASB staff updated the Work Plan to indicate that the Board plans to complete its core model outreach in the 2nd half of 2020.
January 2020
On January 31, 2020, the IASB staff updated the Work Plan to indicate that the IASB plans to carry out outreach in respect of its core model in Q2/2020.
November 2019
On November 25, 2019, the IASB staff updated the Work Plan to indicate that the Board plans to carry out outreach in respect of its core model in the first half of 2020.
October 2019
On October 1, 2019, the IASB® staff updated the work plan to indicate that the Board expects to develop its core model by December 2019.
July 2019
On July 29, 2019, the IASB® staff updated the work plan to indicate that the Board expects to develop its core model by Q4/2019.
December 2018
On December 14, 2018, the IASB® staff updated the work plan to indicate that the Board expects to develop its core model by the second half of 2019.
January 2018
On January 26, 2018, the IASB Staff updated this project to indicate that the IASB now expects to develop its core model by the first half of 2019.
December 2017
On December 18, 2017, the IASB staff updated the work plan to indicate that the IASB expects to publish a Discussion Paper for comment in 2019.
June 2017
In June 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue a Discussion Paper in respect of this project in the 2nd half of 2018.
March 2017
On March 23, 2017, the IASB staff issued an updated Work Plan which indicates that the IASB expects to publish a Discussion Paper in respect of this project for comment after September 2017.
December 2016
On December 15, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish a Discussion Paper for comment after June 2017.
September 2016
On September 23, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish a Discussion Paper for comment sometime after March 31, 2017.
July 2016
On July 20, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to issue a Discussion Paper sometime after January 31, 2017.
October 2014
On October 23, 2014, the EFRAG, EFFAS, ABAF and the IASB published a Summary Report of their third user (investor) outreach event relating to the ED, which was held on July 7, 2014. The event included: presentations from preparers explaining current practices in the banking and insurance sectors and from analysts on how the information is understood and used; an explanation of preliminary IASB and EFRAG positions; and a question and answer session.
April 2014
On April 17, 2014, the IASB issued for public comment a Discussion Paper (DP) exploring an approach to better reflect entities’ dynamic risk management activities in their financial statements, otherwise known as macro hedging.
