BC59 The Board decided to require disclosure of a sensitivity analysis for each type of market risk (paragraph 40) because:
(a) users have consistently emphasised the fundamental importance of sensitivity analysis;
(b) a sensitivity analysis can be disclosed for all types of market risk and by all entities, and is relatively easy to understand and calculate; and
(c) it is suitable for all entities - including non-financial entities - that have financial instruments. It is supported by disclosures of how the entity manages the risk. Thus, it is a simpler and more suitable disclosure than other approaches, including the disclosures of terms and conditions and the gap analysis of interest rate risk previously required by IAS 32.
The Board noted that information provided by a simple sensitivity analysis would not be comparable across entities. This is because the methodologies used to prepare the sensitivity analysis and the resulting disclosures would vary according to the nature of the e
…