CERTYNEX IFRS ACADEMY

Four employees from different groups describe their practice for the interest rate sensitivity analysis. Which of these practices is wrong?

For its floating-rate borrowings, the entity uses an arbitrary ten-point change, without assessing what is reasonably possible.

The entity provides a sensitivity analysis for each type of market risk to which it is exposed at the reporting date.

The entity assesses which changes in the risk variables are reasonably possible before calculating the effects of those changes.

The entity states the effects of these changes on profit or loss and on equity, with the methods and assumptions used.