The International Accounting Standards Board (IASB) has extended the deadline for comments on its proposed Risk Mitigation Accounting model to 30 November 2026. The same deadline applies to companies submitting fieldwork results on the proposals.

The proposals would amend IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. They are intended to improve how financial reporting reflects the way financial institutions manage interest-rate risk. The consultation remains a proposal and is not yet an accounting requirement. The IASB said the extension responds to feedback that stakeholders need more time to consider the technical and operational consequences.

What changed

The IASB has aligned the deadline for comment letters with the deadline for fieldwork results. This gives affected organisations additional time to test the proposed model, assess its effect on financial reporting and provide evidence-based feedback.

The proposal also has implications for companies that continue applying the hedge-accounting requirements in IAS 39 Financial Instruments: Recognition and Measurement. The IASB has indicated that it wants input from those entities, including organisations that do not expect to apply the proposed Risk Mitigation Accounting model.

At this stage, businesses should not treat the proposed amendments as enacted changes to IFRS Accounting Standards. The IASB’s consultation process must still be completed and the proposals may change before any final requirements are issued.

Who should pay attention?

The development is most relevant to banks, investment businesses, treasury operations and larger corporates with significant interest-rate exposures or formal hedging programmes. It may also matter to South African groups reporting under IFRS where financial instruments, derivatives or hedge-accounting documentation form part of the annual financial statements.

Smaller businesses that do not use derivatives or hedge-accounting models are unlikely to be directly affected in the short term. However, finance teams supporting a larger group, lender reporting package or complex funding structure should establish whether the group’s treasury activities fall within the scope of the proposals.

What finance teams should check

  • Identify whether the business applies hedge accounting under IFRS 9 or continues to use relevant IAS 39 requirements.
  • List interest-rate risk management strategies, including swaps, caps, collars and other derivative instruments.
  • Review hedge documentation, effectiveness testing and the quality of data supporting current disclosures.
  • Ask whether the proposed model could change recognition, measurement, presentation or disclosure processes.
  • Confirm whether the group, auditor or treasury function plans to submit comments or participate in fieldwork before 30 November 2026.

Practical next steps for South African businesses

Start with an internal impact assessment rather than waiting for a final standard. Finance teams should map existing instruments to the proposed requirements, document the information currently available and identify any data gaps between treasury records and the general ledger.

Businesses that may be affected should also involve their auditors and technical accounting advisers early. The aim is not to implement a proposal prematurely, but to understand whether systems, controls, valuation models or disclosure processes would need to change if the model is finalised.

For businesses requiring support with financial reporting reviews, accounting controls or year-end preparation, YFP’s accounting and advisory services can help structure the assessment.

Editorial note: The IASB’s Risk Mitigation Accounting model remains under consultation. Companies should rely on the final issued requirements, applicable South African reporting guidance and professional advice when making implementation decisions.