Financial Instruments: Disclosures

In April 2001 the International Accounting Standards Board (Board) adopted IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions, which had originally been issued by the International Accounting Standards Committee in August 1990.

In August 2005 the Board issued IFRS 7 Financial Instruments, which replaced IAS 30 and carried forward the disclosure requirements in IAS 32 Financial Instruments: Disclosure and Presentation. IAS 32 was subsequently renamed as IAS 32 Financial Instruments: Presentation. IAS 1 Presentation of Financial Statements (as revised in 2007) amended the terminology used throughout IFRS, including IFRS 7. In March 2009 the IASB enhanced the disclosures about fair value and liquidity risks in IFRS 7.

The Board also amended IFRS 7 to reflect that a new financial instruments Standard was issued—IFRS 9 Financial Instruments, which related to the classification of financial assets and financial liabilities.

IFRS 7 was also amended in October 2010 to require entities to supplement disclosures for all transferred financial assets that are not derecognised where there has been some continuing involvement in a transferred asset. The Board amended IFRS 7 in December 2011 to improve disclosures in netting arrangements associated with financial assets and financial liabilities.

In May 2017 when IFRS 17 Insurance Contracts was issued, it added disclosure requirements for when an entity applies an exemption for specified treasury shares or for an entity’s own repurchased financial liabilities in specific circumstances.

In September 2019 the Board amended IFRS 9 and IAS 39 by issuing Interest Rate Benchmark Reform to provide specific exceptions to hedge accounting requirements in IFRS 9 and IAS 39 for (a) highly probable requirement; (b) prospective assessments; (c) retrospective assessment (IAS 39 only); and (d) separately identifiable risk components. Interest Rate Benchmark Reform also amended IFRS 7 to add specific disclosure requirements for hedging relationships to which an entity applies the exceptions in IFRS 9 or IAS 39.

In August 2020 the Board issued Interest Rate Benchmark Reform―Phase 2 which amended requirements in IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 relating to:

• changes in the basis for determining contractual cash flows of financial assets, financial liabilities and lease liabilities;

• hedge accounting; and

• disclosures.

The Phase 2 amendments apply only to changes required by the interest rate benchmark reform to financial instruments and hedging relationships.

Other Standards have made minor amendments to IFRS 7. They include Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters (Amendments to IFRS 1) (issued January 2010), Improvements to IFRSs (issued May 2010), IFRS 10 Consolidated Financial Statements (issued May 2011), IFRS 11 Joint Arrangements (issued May 2011), IFRS 13 Fair Value Measurement (issued May 2011), Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) (issued June 2011), Mandatory Effective Date and Transition Disclosures (Amendments to IFRS 9 (2009), IFRS 9 (2010) and IFRS 7) (issued December 2011), Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (issued October 2012), IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) (issued November 2013), Annual Improvements to IFRSs 2012–2014 Cycle (issued September 2014), Disclosure Initiative (Amendments to IAS 1) (issued December 2014), IFRS 16 Leases (issued January 2016), Annual Improvements to IFRS Standards 2014–2016 Cycle (issued December 2016), Amendments to IFRS 17 (issued June 2020), Disclosure of Accounting Policies (issued February 2021) and Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) (issued May 2023).

CONTENTS

from paragraph

INTERNATIONAL FINANCIAL REPORTING STANDARD 7

FINANCIAL INSTRUMENTS: DISCLOSURES

OBJECTIVE 1

SCOPE 3

CLASSES OF FINANCIAL INSTRUMENTS AND LEVEL OF DISCLOSURE 6

SIGNIFICANCE OF FINANCIAL INSTRUMENTS FOR FINANCIAL POSITION AND PERFORMANCE 7

Statement of financial position 8

Statement of comprehensive income 20

Other disclosures 21

NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS 31

Qualitative disclosures 33

Quantitative disclosures 34

TRANSFERS OF FINANCIAL ASSETS 42A

Transferred financial assets that are not derecognised in their entirety 42D

Transferred financial assets that are derecognised in their entirety 42E

Supplementary information 42H

INITIAL APPLICATION OF IFRS 9 42I

EFFECTIVE DATE AND TRANSITION 43

WITHDRAWAL OF IAS 30 45

APPENDICES

A Defined terms

B Application guidance

C Amendments to other IFRSs

APPROVAL BY THE BOARD OF IFRS 7 ISSUED IN AUGUST 2005

APPROVAL BY THE BOARD OF AMENDMENTS TO IFRS 7:

Improving Disclosures about Financial Instruments issued in March 2009

Disclosures—Transfers of Financial Assets issued in October 2010

Mandatory Effective Date of IFRS 9 and Transition Disclosures (Amendments to IFRS 9 (2009), IFRS 9 (2010) and IFRS 7) issued in December 2011

Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011

IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) issued in November 2013

Interest Rate Benchmark Reform issued in September 2019

Interest Rate Benchmark Reform—Phase 2 issued in August 2020

Supplier Finance Arrangements issued in May 2023

FOR THE ACCOMPANYING GUIDANCE LISTED BELOW, SEE PART B OF THIS EDITION

• IMPLEMENTATION GUIDANCE
• APPENDIX
• Amendments to guidance on other IFRSs

FOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITION

• BASIS FOR CONCLUSIONS
• APPENDIX TO THE BASIS FOR CONCLUSIONS
• Amendments to Basis for Conclusions on other IFRSs

International Financial Reporting Standard 7 Financial Instruments: Disclosures (IFRS 7) is set out in paragraphs 1–45 and Appendices A–C. All the paragraphs have equal authority. Paragraphs in bold type state the main principles. Terms defined in Appendix A are in italics the first time they appear in the Standard. Definitions of other terms are given in the Glossary for International Financial Reporting Standards. IFRS 7 should be read in the context of its objective and the Basis for Conclusions, the Preface to IFRS Standards and the Conceptual Framework for Financial Reporting. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.