IFRS 7 Financial Instruments: Disclosures Summary

IFRS 7 Financial Instruments: Disclosures
• Issued in August 2005: replaced IAS 30
• Recent amendment: by IFRS 3 revised in January 2008 

IFRS 7 Disclosures

 
• An entity must group its financial instruments into classes of similar instruments and, when disclosures are required, make disclosures by class.
• The two main categories of disclosures required by IFRS 7 are:

(1)Information about the significance of financial instruments.
(2) Information about the nature and extent of risks arising from financial instruments.

Balance Sheet/ Financial position Disclosures Required by IFRS 7

• Financial assets measured at fair value through profit and loss, showing separately those held for trading and those designated at initial recognition.
• Held-to-maturity investments.
• Loans and receivables.
• Available-for-sale assets.
• Financial liabilities at fair value through profit and loss, showing separately those held for trading and those designated at initial recognition.
• Financial liabilities measured at amortised cost.

Income Statement and Equity Disclosures Required by IFRS 7

• Items of income, expense, gains, and losses, with separate disclosure of gains and losses from different classes of financial assets
• Interest income and interest expense for those financial instruments that are not measured at fair value through profit and loss 
• Fee income and expense
• Amount of impairment losses on financial assets
• Interest income on impaired financial assets

Other disclosures required by IFRS 7

• Accounting policies for financial instruments
• Information about hedge accounting
• The amount that was so recognised in equity during the period.
• The amount that was removed from equity and included in profit or loss for the period.
• The amount that was removed from equity during the period and included in the initial measurement of the acquisition cost or other carrying amount of a non-financial asset or non- financial liability in a hedged highly probable forecast transaction.
• Comparable carrying amounts.
• Description of how fair value was determined.
• Detailed information if fair value cannot be reliably measured.