(12)The back-testing and the profit and loss attribution requirements provide a solid basis for a critical monitoring of the performance of the internal-risk measurement model. It is therefore necessary to lay down assessment rules to consider the results of those tests. In relation to back-testing, it should be ensured that overshootings are critically analysed to identify potential weaknesses in the model, and that institutions monitor whether the changes in the portfolios’ values are driven by modellable or by non-modellable risk factors. Furthermore, in light of the profit and loss attribution test results, competent authorities should assess the accuracy of the pricing functions employed by the institution, as their accuracy is essential for a sound calculation of the own funds requirements.