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Current stage

The IASB developed and refined ‘core areas’ that are central to an accounting model (core model) that might enable investors to understand the effect of a company’s dynamic risk management. The model’s development reflects information gathered at meeting with banks that use dynamic risk management for repricing risk due to changes in interest rate.

The project was added to the standard-setting programme in May 2022, and the IASB will discuss detailed project proposals at a future IASB meeting.

IASB® Update November 2022

The IASB met on 23 November 2022 to begin discussions on the next phase in the development of the Dynamic Risk Management (DRM) model. The IASB discussed:

  • whether equity is eligible for inclusion in determining an entity’s current net open risk position (Agenda Paper 4A); and
  • whether a previous tentative decision to require notional alignment between the asset profile and the target profile in the DRM core model is still necessary following the recent refinements to the DRM model (Agenda Paper 4B).

Managing equity (Agenda Paper 4A)

The IASB tentatively decided that in determining an entity’s current net open risk position, the inclusion of equity is not necessary, and therefore, equity is not an eligible item for the purpose of the DRM model.

All 11 IASB members agreed with this decision.

Notional alignment of designated assets and liabilities (Agenda Paper 4B)

The IASB tentatively decided that in determining an entity’s current net open risk position, notional alignment is not required between the designated assets and liabilities.

All 11 IASB members agreed with this decision.

Next milestone

Exposure Draft