Global Standards for the world economy

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IFRS 9: Financial Instruments

IASB meeting summaries and observer notes

 IASB July 2012


As part of its deliberations on accounting for macro hedging, the IASB discussed how some entities incorporate capital management objectives into their overall risk management. In an interest rate risk context, this is colloquially referred to as an 'equity model book'. When applying this approach, capital is typically considered as a fixed interest rate risk profile, which is then included in interest rate risk management, reflecting multi-dimensional risk management objectives (multidimensional in the sense that the capital objectives combine retaining or avoiding fixed interest rate exposures for different time horizons). The IASB discussed the accounting implications of using or not using an equity model book within the accounting for macro hedging. This relates to step 7 of the 11 step overview presented at the November 2011 meeting.

No decisions were made.

The IASB will continue its discussion at future meetings.

Date: 7/17/2012