18/01/2015 - Feedback statement on EFRAG Letter to the IASB on Accounting for Dynamic Risk Management: a Portfolio Revaluation Approach to Macro Hedging

On 30 October 2014, EFRAG issued a comment letter to the IASB. While commending the IASB's efforts in analysing banks' risk management practices and developing new thinking in how to best reflect the effects of such practices in the financial statements, EFRAG did not support the expansion of the scope of the project by considering the revaluation of all portfolios that are dynamically managed. Instead EFRAG called for a return to the original aim of the project: the development of a hedge accounting solution for open portfolios.

EFRAG also emphasised that in addition to banks, other sectors such as the insurance industry and the utilities sector were interested in the development of a macro hedge accounting solution covering different types of risks.

The feedback statement summarises comments received from EFRAG's public consultation and how those comments were considered by EFRAG TEG in its discussions on its letter to the IASB.