This note provides an overview of the requirements of a money laundering (ML) and terrorism financing (TF) risk assessment (ML/TF Risk Assessment) under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No 1) (Cth). It considers what an ML/TF Risk Assessment is, who needs to undertake an ML/TF Risk Assessment and when it must be done. It summarises the steps required to undertake and maintain an ML/TF Risk Assessment, including identifying ML/TF risks, using appropriate assessment scales, identifying existing anti-money laundering and counter-terrorism financing controls and assessing residual risk. This note considers challenges a reporting entity may experience in undertaking an ML/TF Risk Assessment and provides practical recommendations for completing an ML/TF Risk Assessment. It also provides an example of an expected output from an ML/TF Risk Assessment.