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IFRS Risk Mitigation Accounting (RMA)

Banks will soon have the opportunity to optimise how they present the effects of their repricing risk management strategies in their financial statements. The IASB is finalising its risk mitigation accounting (RMA) project, with recent updates published in an Exposure Draft in December 2025. RMA aims to achieve closer alignment between a company’s activities to mitigate repricing risk and the resulting accounting treatment.

Deloitte has been following these developments closely in alignment with regulators and the banking industry, and is ready to assist in exploring the impact this will have on accounting for repricing risk with a purpose-built RMA tool.

RMA in brief

The IASB's Risk Mitigation Accounting (RMA) project involves the development of a new accounting standard designed to succeed the current IAS 39 requirements for portfolio fair value hedge accounting for interest rate risk.
Compared to IAS 39, the RMA model offers more flexibility to designate a wider range of hedged items, strengthening the interaction between risk management and accounting.
A key amendment introduces risk limits aligned to economic metrics actually used by banks for their risk management strategy as the basis for designating hedged items to cover the net repricing risk exposure of the balance sheet, with fair value changes accounted for as a “risk mitigation adjustment”.
Under the updated framework, hedged items represent the net repricing risk exposure derived from the underlying portfolios. This enables an entity to designate assets, liabilities and future transactions that give rise to repricing risk, including exposures that would not qualify under IAS 39, such as core demand deposits.

How is the proposed RMA model designed to work?

Continuous Designation

RMA requires that companies establish repricing time bands based on expected repricing dates; these time bands form the basis for the risk mitigation objective, which is expressed as an absolute amount. The risk mitigation objective can be updated as frequently as necessary and the hedge relationship does not need to be discontinued unless the company changes its risk management strategy.

RMA Process Map

The RMA model comprises six subprocesses, beginning with the risk management strategy and progressing through to the designation and measurement of the relationship, resulting in the recognition of the RMA adjustment.

Benchmark Derivatives

To determine the RMA adjustment on the balance sheet, benchmark derivatives are used (not unlike the hypothetical derivative approach used under IFRS 9).

Calculation

The RMA adjustment is calculated by applying the “lower-of” test to the fair value changes of both the benchmark and designated derivatives, a concept well-established in cash flow hedge accounting under IFRS 9.

An overview of the RMA framework

How can Deloitte support?

Knowledge exchange: We can provide you with tailored, ongoing insights from our RMA specialists to meet your specific needs.
Implementation support: Partnering to refine data, processes, internal controls and methodology approaches for improved outcomes.
RMA simulation: Projecting potential balance sheet and profit and loss impacts using Deloitte’s RMA tool.
RMA roadmap: Collaborative creation of a governance framework and plan for a potential preliminary RMA study or implementation.

For any questions or further insights, please do not hesitate to contact our specialists Dirk Lommerse, Partner Audit & Assurance, or Paul de Cock, Senior Manager Audit & Assurance.