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IFRS 7 Financial Instruments: Disclosures

IFRS 7 Financial Instruments: Disclosures requires disclosures about the significance of financial instruments on financial performance and position, and the nature and extent of risks arising.

Published August 2005. Effective 1 January 2007.

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Financial Reporting Faculty members get full access. Login to get the version of the standard relevant to specific time periods via eIFRS.

ICAEW members and non-members can view a brief synopsis, amendments and details of current proposals.

*UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Synopsis

IFRS 7 requires two main categories of financial instruments disclosure:

  • Information about the significance of financial instruments on financial performance and position, including:
  • Carrying value of each of the categories of financial instrument
  • amounts recognised in profit or loss with respect to financial instruments
  • descriptions of hedging arrangements
  • information about fair values of each class of financial instrument

Information about the nature and extent of risks arising from financial instruments, including:

  • Qualitative disclosures describing risk exposures for each type of financial instrument and the management of risk
  • Quantitative disclosures including summary quantitative data about exposure to risk at the reporting date and specific exposure to credit, liquidity and market risk.

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Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

1. IFRS 9 amendment to IFRS 7

Effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted.

IFRS 9 amends IFRS 7 to:

  • Refer to IFRS 9 and its accounting requirements
  • Refer to the new requirements of IFRS 15
  • Add new paragraphs which provide disclosure requirements for financial assets measured at fair value through other comprehensive income.
  • Expand guidance in respect of disclosing credit risk.
2. Mandatory Effective Date and Transition Disclosures amendment to IFRS 7

To be applied to annual periods beginning on or after 1 January 2018. Earlier adoption is permitted.

The amendment to IFRS 7 provides the requirements for modified disclosures on transition from IAS 39 to IFRS 9, including reclassification disclosures regardless of whether they would normally be required due to a change in business model.

3. Annual Improvements to IFRSs 2012-2014 Cycle
To be applied to annual periods beginning on or after 1 January 2016. Earlier application is permitted.

IFRS 7 is amended to:
  • add guidance that clarifies how an entity should apply the guidance in IFRS 7 to a servicing contract to decide whether a servicing contract is ‘continuing involvement’
  • clarify that the additional disclosure required by the amendments to IFRS 7 Disclosure – Offsetting Financial Assets and Financial Liabilities is not specifically required for all interim periods.
Read Annual Improvements to IFRSs 2012-2014 Cycle 
4. Disclosure Initiative – Amendments to IAS 1
To be applied to annual periods beginning on or after 1 January 2016. Earlier application is permitted.

Minor consequential amendments to IFRS 7 remove the word  ‘summary’ when  referring to the disclosure of significant accounting policies’ in the notes.

Read Disclosure Initiative – Amendments to IAS 1
5. IFRS 16 Leases amendment to IFRS 7

To be applied to periods beginning on or after 1 January 2019. Earlier adoption is permitted.

IFRS 7 is amended to add lease liabilities to the list of items for which fair value disclosure is not required.

6. IFRS 17 Insurance Contracts amendment to IFRS 7

To be applied to periods beginning on or after 1 January 2021. Earlier adoption is permitted.

IFRS 7 is amended to:

  • Reflect, in its disclosure requirements, changes made to IFRS 9 as a result of the issue of IFRS 17.

*Not EU endorsed as at 19 December 2017. Read more on EU Endorsement.

The following interpretations refer to IFRS 7

UK reduced disclosures

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

FRS 101 paragraph 8(d) states that a qualifying entity is exempt from all of the requirements of IFRS 7 with the following limitations.

  • This exemption is not applicable to a financial institution.
  • Non-financial institutions must make additional disclosures if certain financial instruments are measured at fair value.
  • Equivalent disclosures must be made in the consolidated financial statements of the group in which the entity is consolidated.

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This page was last updated 19 December 2017