(First of two parts)
The 2008 financial crisis has led to some significant changes in the areas of fair value and risk management, including an increased emphasis on counterparty credit risk in derivatives. These changes are starting to take root in the Philippines through the implementation of Philippine Financial Reporting Standard (PFRS) 13, Fair Value Measurement, and the adoption of the Basel III capital reforms on counterparty credit risk. PFRS 13, which took effect on Jan. 1, 2013, requires all entities to consider credit risk in determining the fair value of derivatives. The Bangko Sentral ng Pilipinas (BSP) plans to adopt the Basel III capital rules on counterparty credit risk, currently contained in an exposure draft that is expected to take effect starting Jan. 1, 2014 when finalized.
Aug 112013