Risk accounting

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Risk Accounting stands for a concept for risk- related or risk- dependent accounting and valuation of a company's financial assets and liabilities .

While accounting generally refers to the (mostly legally standardized) standard accounting rules, risk accounting stands for an alternative concept that deviates from this, according to which special cases subject to certain criteria can be accounted for. Risk accounting provides a specific assessment for risk-bearing transactions that are accounted for as a financial asset or financial liability, which is based on the inherent financial risk components and their compensation through other transactions (hedging). Existing risk types and types of risk that are subject to compensation or control should be included in the assessment; however, not other uncontrolled risks. The form of the control can be disregarded here.

This is in contrast to hedge accounting , which also suggests a specific valuation for risk-bearing transactions that are accounted for as a financial asset or financial liability, but is based on the specific type of hedge and consequently regulates different types of hedge in a differentiated manner. In this respect, risk accounting is to be understood as a specific accounting variant that only focuses on the existence of financial risks and the mere fact of their control.

Literature sources

• Große, Jan-Velten: The problem of hedge accounting according to IAS 39 . Cologne: Lohmar, 2007, 1st edition.