Is the sensitivity analysis disclosure required to depict the market risk exposure existing as of the end of the fiscal year?
Answer Companies must measure the potential loss in future earnings, fair values, or cash flows for market risk sensitive instruments at the end of the fiscal year. Companies must select hypothetical market changes that are expected to reflect reasonably possible near-term changes in those rates and prices. Near-term means a period going forward up to one year from the date of the financial statements. Alternatively, the average, high and low amounts of risk exposure during the fiscal year may be presented. Companies using this alternative must measure sensitivity of outstanding instruments and positions at least quarterly during the fiscal year. Companies do not need to indicate the period in which the high or low risk levels occurred.
