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Next steps for accounting for dynamic risk management project (IFRS 9)
The DRM project aims to improve financial statements by providing information about the management of risks to which an entity is exposed.
The International Accounting Standards Board’s accounting for dynamic risk management (DRM) project aims to simplify and improve the usefulness of financial statements by providing information about the risks to which an entity is exposed and how they are managed. The board intends to pursue this aim by developing accounting requirements for hedging within the context of open portfolios, which are more closely aligned with an entity’s risk management activities and by reducing operational complexity.
The IASB will focus initially on the information needs of constituents required to reflect better entities’ dynamic risk management activities. The board then plans to consider how those information needs could be addressed through disclosures before considering those areas that need to be addressed through recognition and measurement. Although the first step is focusing on information needs and disclosures, there is no intention to turn this into a disclosure-only project.