5 December 2025To: Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON THE IASB EXPOSURE DRAFTRisk Mitigation AccountingProposed amendments to IFRS 9 and IFRS 7Comments to be received by 1 June 2026 30 September 2026The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute of CertifiedPublic Accountants (Institute) is seeking comments on the International Accounting StandardsBoard (IASB) Exposure Draft (ED) Risk Mitigation Accounting – Proposed amendments to IFRS9 Financial Instruments and IFRS 7 Financial Instruments – Disclosures. The ED package,comprising the IASB’s detailed proposals, basis for conclusions, illustrative examples andimplementation guidance, along with a snapshot providing a high-level summary of the proposals,is available on the Institute’s website.The proposed Risk Mitigation Accounting (RMA) model responds to feedback from financialinstitutions and investors that the current hedge accounting requirements in IFRS 9 or IAS 39Financial Instruments: Recognition and Measurement do not adequately reflect how interest raterisk is managed in practice. The model aims to provide greater transparency into how interestrate risk management affects financial performance and future cash flows in a dynamicenvironment.Key proposals in the Exposure DraftTo integrate the RMA model and enhance disclosures about interest-rate risk managementactivities, the IASB proposes amendments to IFRS 9 and IFRS 7 in the following areas:
•Objective and scope of RMA•Underlying portfolios•Determining the net repricing risk exposure•Designated derivatives•Risk mitigation objective and benchmark derivatives•Recognising and measuring the risk mitigation adjustment•Discontinuation of RMA•Disclosure requirementsIn addition, the IASB proposes withdrawing the macro hedge accounting requirements in IAS 39and the option in IFRS 9.6.1.3 that permits entities to apply the requirements in IAS 39 to aportfolio hedge of interest rate risk.Impact on entities in Hong KongThe IASB’s proposals on RMA could significantly impact entities, particularly banks, that currentlyapply the hedge accounting under IFRS 9 or IAS 39 to account for their dynamic risk managementactivities. Although adoption is optional, entities would need to assess whether the RMA modelcould provide a better reflection of the economic effects of their risk management activities in theirfinancial statements. Transitioning to RMA would impact not only financial reporting but alsooperational processes, requiring substantial changes to systems, documentation and disclosures.Other entities, such as insurers, also manage repricing risk. The IASB is also seeking feedbackfrom insurance companies and will decide the next steps for them after considering the responsesreceived.Comment due date extendedto 30 September 2026How to submit commentsThe FRSC invites your comments on the Exposure Draft by 1 June 2026 30 September 2026 toallow your comments to be considered in developing its response to the IASB. Comments shouldbe supported by specific reasoning and submitted in written form by email tocommentletters@hkicpa.org.hk.Comments will be acknowledged and may be made available for public review unless otherwiserequested by the respondent.In addition to inviting comments on the proposals in the ED, the IASB is also inviting companiesthat manage repricing risk on a net basis to participate in fieldwork to assess the likely effects ofthe proposed RMA model. Financial institutions and other interested parties are encouraged totest the model and provide practical feedback. Please refer to Request for Fieldwork for furtherinformation and contact the Institute if interested.
Invitation to Comment on IASB Exposure Draft Risk Mitigation Accounting
下载原件5 December 2025To: Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON THE IASB EXPOSURE DRAFTRisk Mitigation AccountingProposed amendments to IFRS 9 and IFRS 7Comments to be received by 1 June 2026 30 September 2026The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute of CertifiedPublic Accountants (Institute) is seeking comments on the International Accounting StandardsBoard (IASB) Exposure Draft (ED) Risk Mitigation Accounting – Proposed amendments to IFRS9 Financial Instruments and IFRS 7 Financial Instruments – Disclosures. The ED package,comprising the IASB’s detailed proposals, basis for conclusions, illustrative examples andimplementation guidance, along with a snapshot providing a high-level summary of the proposals,is available on the Institute’s website.The proposed Risk Mitigation Accounting (RMA) model responds to feedback from financialinstitutions and investors that the current hedge accounting requirements in IFRS 9 or IAS 39Financial Instruments: Recognition and Measurement do not adequately reflect how interest raterisk is managed in practice. The model aims to provide greater transparency into how interestrate risk management affects financial performance and future cash flows in a dynamicenvironment.Key proposals in the Exposure DraftTo integrate the RMA model and enhance disclosures about interest-rate risk managementactivities, the IASB proposes amendments to IFRS 9 and IFRS 7 in the following areas:
•Objective and scope of RMA•Underlying portfolios•Determining the net repricing risk exposure•Designated derivatives•Risk mitigation objective and benchmark derivatives•Recognising and measuring the risk mitigation adjustment•Discontinuation of RMA•Disclosure requirementsIn addition, the IASB proposes withdrawing the macro hedge accounting requirements in IAS 39and the option in IFRS 9.6.1.3 that permits entities to apply the requirements in IAS 39 to aportfolio hedge of interest rate risk.Impact on entities in Hong KongThe IASB’s proposals on RMA could significantly impact entities, particularly banks, that currentlyapply the hedge accounting under IFRS 9 or IAS 39 to account for their dynamic risk managementactivities. Although adoption is optional, entities would need to assess whether the RMA modelcould provide a better reflection of the economic effects of their risk management activities in theirfinancial statements. Transitioning to RMA would impact not only financial reporting but alsooperational processes, requiring substantial changes to systems, documentation and disclosures.Other entities, such as insurers, also manage repricing risk. The IASB is also seeking feedbackfrom insurance companies and will decide the next steps for them after considering the responsesreceived.Comment due date extendedto 30 September 2026How to submit commentsThe FRSC invites your comments on the Exposure Draft by 1 June 2026 30 September 2026 toallow your comments to be considered in developing its response to the IASB. Comments shouldbe supported by specific reasoning and submitted in written form by email tocommentletters@hkicpa.org.hk.Comments will be acknowledged and may be made available for public review unless otherwiserequested by the respondent.In addition to inviting comments on the proposals in the ED, the IASB is also inviting companiesthat manage repricing risk on a net basis to participate in fieldwork to assess the likely effects ofthe proposed RMA model. Financial institutions and other interested parties are encouraged totest the model and provide practical feedback. Please refer to Request for Fieldwork for furtherinformation and contact the Institute if interested.