Interest rate risk and Strategic Report: Difference between pages

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The risk associated with a change in interest rates.  
''Financial reporting.''


All companies, that are not small, are required by the Companies Act 2006 [http://www.legislation.gov.uk/ukdsi/2013/9780111540169/part/2]  to prepare a Strategic Report containing a fair and balanced analysis of:


This may take several forms in the treasury context.
a) the development and performance of the company’s business during the financial year;


For example, and depending on the direction of the change:
b) the position of the company at the end of the year; and,
*Increasing interest cost
*Falling interest income
*Changing market value of debt, or of pension liabilities
*Differences in competitiveness
*The changing nature of a market when interest rates change
*Secondary effects, especially potentially adverse effects, resulting from any of the primary effects above. For example, potential breaches of interest cover covenants.


c) a description of the principal risks and uncertainties facing the company.


Sometimes written 'interest-rate risk'.
The purpose of the Strategic Report is to inform members of the company and help them assess how the directors have performed their duty.




== See also ==
The Strategic Report replaces the Operating and Financial Review/Business review section of the Annual Report. It is in addition to the Directors' report.
* [[Asset-liability management]]
* [[Cross-currency interest rate swap]]
* [[Double-whammy]]
* [[Exposure]]
* [[Fair value interest rate risk]]
* [[Financial covenant]]
* [[Forward rate agreement]]
* [[Guide to risk management]]
* [[Interest cover]]
* [[Interest rate]]
* [[Interest rate cap]]
* [[Interest rate collar]]
* [[Interest rate exposure]]
* [[Interest rate floor]]
* [[Interest rate futures]]
* [[Interest rate gap]]
* [[Interest rate guarantee]]
* [[Interest rate option]]
* [[Interest Rate Risk in the Banking Book]]  (IRBB)
* [[Interest rate shock]]
* [[Interest rate swap]]
* [[IRHP]]
* [[Matching]]
* [[Pipeline risk]]
* [[Portfolio hedging]]
* [[Risk-free rate of return]]
* [[Risk-free rates]]
* [[Shock]]
* [[Time bins]]




== Other resource ==
==See also==
* [[Annual report]]
*[[Directors report]]


[[Media:2015_05_May_-_The_devil_is_in_the_detail.pdf| The devil is in the detail, The Treasurer, 2015]]


[[Category:Manage_risks]]
==Other links==
*[https://www.frc.org.uk/Our-Work/Publications/Accounting-and-Reporting-Policy/FRC-Staff-Guidance-Note-Strategic-Report-Regulatio.aspx] FRC Staff Guidance Note: The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 – Key Facts

Revision as of 10:07, 4 April 2014

Financial reporting.

All companies, that are not small, are required by the Companies Act 2006 [1] to prepare a Strategic Report containing a fair and balanced analysis of:

a) the development and performance of the company’s business during the financial year;

b) the position of the company at the end of the year; and,

c) a description of the principal risks and uncertainties facing the company.

The purpose of the Strategic Report is to inform members of the company and help them assess how the directors have performed their duty.


The Strategic Report replaces the Operating and Financial Review/Business review section of the Annual Report. It is in addition to the Directors' report.


See also


Other links

  • [2] FRC Staff Guidance Note: The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 – Key Facts