IFRS 7: Financial Instruments: Disclosures

OBJECTIVE
 
The objective of IFRS 7 is to deal with the disclosures required in an entity’s financial statements in connection with financial instruments. Before the issuance of this IFRS, the disclosure requirements were contained within IAS 32. IAS 32 now contains just the presentation requirements of financial instruments.
 
This IFRS applies to all entities, including entities that have few financial instruments (e.g. simply receivables and payables).
 
In order to enable users to evaluate the effect of financial instruments in an entity’s financial statements, IFRS 7 requires the following disclosures to be contained within the financial statements:
 
  • the significance of financial instruments for the entity’s financial position and performance; and
  • the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the end of the reporting period and how the entity manages those risks. 
 
Qualitative Disclosures
 
The qualitative disclosures describe management’s objectivities, policies and processes for managing those identified risks.
 
Quantitative Disclosures
 

The quantitative disclosures provide the information needed about the extent to which the entity is exposed to risk based on information provided internally to the entity’s key management personnel.

About the author:

Steve Collings FMAAT ACCA DipIFRS is Audit Manager at Leavitt Walmsley Associates www.lwaltd.com. Read all of Collings's analyses of the International Financial Reporting Standards.

You may like these other stories...

London Stock Exchange switches auditing to EYThe London Stock Exchange will drop PwC as its auditor and replace it with EY after completion of the audit for the year ending March 2014, Harriet Agnew of the Financial Times...
The Financial Accounting Standards Board (FASB) had hoped to issue a final standard on revenue recognition during the first quarter of this year. However, the standard-setting organization confirmed today that the timetable...
IRS revokes group’s tax exemption over anti-Clinton statementsGregory Korte of the USA Today reported on Monday that the IRS has revoked the tax-exempt status of a conservative-aligned charity, the Patrick Henry Center...

Upcoming CPE Webinars

Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.
May 1
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.