Risk report

A risk report is the part of the management report from a prepare their financial statements companies to be dispensed risk communication of economic and technical risks , its future development and the possible risk management .

General

Risks and the possibilities of limiting them are a central topic in business administration , as they are inextricably linked with entrepreneurial activity. The annual report of a company to the interested parties about all facts explain that during a financial year have occurred. In the past, companies were usually satisfied with information about successes and failures that had occurred, but often neglected reporting on dangers and opportunities that will only have an impact in the future. The legislator has this deficiency in business reports with the KonTraG applicable to corporationsEliminated in May 1998 and obliged the company to add a risk report to the management report for the purpose of risk communication and to document risks that threaten the existence of the company and also to “ address the risks of future development”.

content

A company must be able to present all future risks and quantify their effects on the company and the likelihood of damage. Since January 2005, according to Section 289 (1) and Section 315 (1) of the German Commercial Code, “the likely development with its main opportunities and risks must be assessed and explained”. Since “risks and opportunities” are not defined in more detail here, these are indefinite legal terms . Opportunities are the possibilities of an increase in value, a profit or another economic advantage, risks are the danger of a decrease in value, a loss or some other economic disadvantage. The IDW understands "the possibility of unfavorable future developments with a significant, though not necessarily more likely than not to be expected." The DRS define risk as "potential future developments or events that led to a negative for the company forecasting or Target deviation can lead ".

The forecast , opportunity and risk report is intended to enable the discreet addressee, in conjunction with the consolidated financial statements, to obtain an accurate picture of the expected development of the Group and the associated significant opportunities and risks. According to DRS 20, the effects of risks are to be presented and assessed. The risks can be presented and assessed before the measures taken to limit the risk and the measures taken to limit the risk (gross assessment). Alternatively, the risks that remain after the implementation of risk limitation measures can be presented and assessed (net view). The risk report thus forms the core of the management report.

Cross-industry risk types

Entrepreneurial activity is exposed to a large number of risks, some of which are insurable and then do not have to be presented in the risk report. In particular, companies can be exposed to the following risks:

• Technical risks
  • Research and development risk
  • Procurement risk
  • Production risk
    • Production failure risk
    • Risk of incorrect production
    • Product Liability Risk
  • Storage risk
  • Risk from demand behavior
  • Quality risk
  • Environmental risk
  • Legal risk
• Economic Risks
  • Country risk
  • Overall economic risk
  • Industry risk
  • Financial risks
    • Market risk
      • Sales risk
      • Price risk
      • Interest rate risk
      • Exchange rate risk
    • Counterparty risk
      • Bad debt risk
      • Credit risk
      • Issuer risk
      • Counterparty risk
      • Payment risk
    • Liquidity risk
• Operational risk
  • Personnel risk ( e.g. shortage of skilled workers , fluctuation )
  • Systemic risk
• strategic risks
  • Reputational risk
  • competitiveness
• other risks (risk of bankruptcy , natural disasters , epidemics , terrorist attacks ).

banks and insurance companies

Since the economic risks play a special role at banks and insurance companies , there are special regulations here. According to circular BaFin 10/2012 (BA) MaRisk , the risk reporting must be written in a comprehensible, meaningful manner (AT 4.3.2). In addition to a presentation, it must also contain an assessment of the risk situation. "If necessary, suggestions for action can also be included in the risk reporting, e. B. to reduce risk. ... In the risk reports, the results of the stress tests and their potential effects on the risk situation and the risk coverage potential must also be presented. ”It is to be prepared quarterly by Risk Controlling and submitted to management. In the case of banks, the obligation to prepare a risk report results from Art. 113 Paragraph 7d, 435 Paragraph 1c of the Capital Adequacy Ordinance (CRR); By 2016, insurance companies had to prepare a risk report in accordance with section 64a (1) no.3 letter d VAG and submit it to the supervisory authority in accordance with section 55c VAG. Since the new version of the VAG, extended regulations and publication obligations can be found in its section 26 (1) sentences 1 and 2 and section 40 as a solvency and financial report .

See also

• Opportunity management
• Opportunity report

Individual evidence

1. ↑ Silvia Rogler, Risk Management in Industrial Operations , 2002, p. 1
2. ↑ Walther Busse von Colbe / Monika Ordelheide / Günther Gebhardt / Bernhard Pellens, Consolidated Financial Statements: Accounting According to Business Management Principles , 2010, p. 627 ff.
3. ↑ Barbara Selch, The management report: Risk reporting and list according to IDW RS and HFA 1 , 2003, p. 161
4. ↑ IDW, statement on accounting, preparation of the management report (IDW RS HFA 1), 2012, No. 29
5. ↑ DRS 20 of September 14, 2012, No. 157, p. 28 f.
6. ↑ BaFin, reference number BA 54-FR 2210-2012 / 0002