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COMMISSION REGULATION (EC) No 108/2006 of 11 January 2006
amending Regulation (EC) No 1725/2003 adopting certain
international accounting standards in accordance with
Regulation (EC) No 1606/2002 of the European Parliament
and of the Council.
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Market risk
Sensivity analysis
40. Unless an entity complies with paragraph 41, it
shall disclose:
(a) a
sensitivity analysis for each type of market risk to
which the entity is exposed at the reporting date,
showing how profit or loss and equity would have
been affected by changes in the relevant risk
variable that were reasonably possible at that date;
(b) the
methods and assumptions used in preparing the
sensitivity analysis; and
(c)
changes from the previous period in the methods and
assumptions used, and the reasons for such changes.
41. If an entity prepares a sensitivity analysis, such
as value-at-risk, that reflects interdependencies
between risk variables (eg interest rates and exchange
rates) and uses it to manage financial risks, it may use
that sensitivity analysis in place of the analysis
specified in paragraph 40. The entity shall also
disclose:
(a) an
explanation of the method used in preparing such a
sensitivity analysis, and of the main parameters and
assumptions underlying the data provided; and
(b) an
explanation of the objective of the method used and
of limitations that may result in the information
not fully reflecting the fair value of the assets
and liabilities involved.
Other market risk disclosures
42. When the sensitivity analyses disclosed in
accordance with paragraph 40 or 41 are unrepresentative
of a risk inherent in a financial instrument (for
example because the year-end exposure does not reflect
the exposure during the year), the entity shall disclose
that fact and the reason it believes the sensitivity
analyses are unrepresentative.
Effecitve
date and transition
43. An entity shall apply this IFRS for annual periods
beginning on or after 1 January 2007. Earlier
application is encouraged. If an entity applies this
IFRS for an earlier period, it shall disclose that fact.
44. If an entity applies this IFRS for annual periods
beginning before 1 January 2006, it need not present
comparative information for the disclosures required by
paragraphs 31-42 about the nature and extent of risks
arising from financial instruments.
Withdrawal of IAS
30
45. This IFRS supersedes IAS 30 Disclosures in the
Financial Statements of Banks and Similar Financial
Institutions.
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