IASB proposes new accounting model to reflect how financial institutions manage interest rate risk

The International Accounting Standards Board (IASB) has today proposed a new accounting model to better reflect how financial institutions manage interest rate risk throughout their portfolios.

The proposed Risk Mitigation Accounting model responds to feedback from financial institutions and investors that the current hedge accounting requirements do not adequately reflect how interest rate risk is managed in practice. The model aims to provide greater transparency into how interest rate risk management affects financial performance and future cash flows in a dynamic environment.

Andreas Barckow, Chair of the IASB, said:

Our proposed Risk Mitigation Accounting model aims to bring accounting and risk management closer together to enhance internal efficiency and strengthen communication between financial institutions and their stakeholders.

To integrate the new accounting model and enhance companies’ disclosures about their interest-rate risk management activities, the IASB is proposing amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. The IASB is also seeking feedback on its proposal to withdraw IAS 39 Financial Instruments: Recognition and Measurement.

The IASB’s consultation on the Risk Mitigation Accounting model is open for comment until 31 July 2026. The 240-day consultation period also includes fieldwork, enabling financial institutions and other interested parties to test the model using their own data and provide practical feedback to the IASB.

Read and comment

This consultation is made up of three parts:

• Exposure Draft Risk Mitigation Accounting—Proposed amendments to IFRS 9 and IFRS 7;
• Basis for Conclusions on Exposure Draft Risk Mitigation Accounting; and
• Illustrative Examples and Implementation Guidance on Exposure Draft Risk Mitigation Accounting.

Additional resources:

• Snapshot of the Exposure Draft Risk Mitigation Accounting; and
• Request for fieldwork on the proposed risk mitigation accounting model.

Submit a comment letter or fieldwork response on the Exposure Draft. The comment period closes on 31 July 2026.