Technical staff from the International Accounting Standards Board (IASB) have produced a series of eight webcasts to explain the Dynamic Risk Management (DRM) project based on the IASB’s tentative decisions to date.
The project’s aim is to get companies to reflect better in their financial statements how interest rate risk management affects the amount, timing and uncertainty of future cash flows.
Content
- Overview of the DRM model (webcast 1)
- Six elements of the DRM
- Risk management strategy and target profile (webcast 2)
- Current net open risk position (webcast 3)
- Risk mitigation intention and benchmark derivatives (webcast 4)
- Designated derivatives (webcast 5)
- Retrospective assessment and unexpected changes (webcast 6)
- Measurement of the DRM adjustment (webcast 7)
- Walkthrough of illustrative example (webcast 8)
This webcast discusses the objective of the DRM project and explains the key elements within the DRM model. View the slide deck for the webcast here.
This webcast focuses on how risk management strategy affects an entity’s dynamic risk management and how an entity would set its target profile. View the slide deck here.
This webcast focuses on the determination of the current net open risk position, which determines the net risk available to be mitigated in the DRM model. View the slide deck here.
This webcast introduces the unique features of the risk mitigation intention, which is a new element to determine the net risk available to be mitigated in the DRM model. It also explains how an entity would use benchmark derivatives to help measure the risk mitigation intention. View the slide deck here.
This webcast discusses the features of the designated derivatives in the DRM model. View the slide deck here.
This webcast discusses the retrospective assessment, which is designed to capture the effect of unexpected changes to an entity’s current net open risk position. View the slide deck here.
This webcast explains how an entity would measure the effect of dynamic risk management and determine the DRM adjustment. View the slide deck here.
This webcast uses a simplified example to illustrate how the DRM model is expected to work in practice, and how different elements explained in the above webcasts link together. View the slide deck here.
