RISK MITIGATION ACCOUNTING: A NEW PORTFOLIO-BASED MODEL UNDER CONSULTATION CONCEPT AND ARCHITECTURE OF THE RMA MODEL

Pierre-Emmanuel Thérond () and Pierre Boutonnet ()
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Pierre-Emmanuel Thérond: LSAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon, Institut de Science Financières et d'Assurance, UCBL - Université Claude Bernard Lyon 1 - Université de Lyon, Thesseract
Pierre Boutonnet: Thesseract

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Abstract: In late 2025, the IASB published an Exposure Draft proposing a new Risk Mitigation Accounting (RMA) model aimed at better reflecting how financial institutions manage interest rate repricing risk on a portfolio basis. The model seeks to reduce accounting volatility arising from measurement asymmetries between derivatives measured at fair value and instruments measured at amortised cost. It introduces a portfolio-based framework built around net repricing risk exposure and the recognition of a risk mitigation adjustment in the balance sheet. The article explains the architecture of the model and discusses its potential implications for insurers, particularly in the context of IFRS 17.

Keywords: IFRS; Risk management; Interest Rate; Hedging; Accounting (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-acc and nep-rmg
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Published in The European Actuary, 2026, 45, pp.21-23

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