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International Accounting Standards Board (IASB) technical staff have produced two new webcasts on developments and tentative decisions made by the IASB in the Dynamic Risk Management (DRM) project.

Since the series of webcasts that was published on the project in October 2022, the two new webcasts focus on:

  • The current net open risk position (CNOP)—In the first webcast, we explain the recent tentative decisions made in relation to items eligible for inclusion in the CNOP. While a company’s own equity and financial assets measured at fair value through profit or loss cannot be designated in the CNOP, financial assets measured at fair value through other comprehensive income may be included in the CNOP.
  • The IASB’s redeliberation on the performance assessment—In the second webcast, we explain the tentative decisions to no longer require the retrospective test against the target profile but instead require a capacity assessment. This is to determine whether the CNOP at the end of a DRM assessment period can realise the expected benefits represented by the DRM adjustment.

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. Stakeholders have told the IASB that more transparency is needed in the financial statements about the interest rate management activities undertaken by companies. The DRM project attempts to address this feedback by bringing the risk management and accounting closer together.


Current net open risk position (CNOP)

IASB’s redeliberation on the performance assessment