Information about the significance of financial instruments
Statement of financial position
Disclose the significance of financial instruments for an entity's financial position and performance. [IFRS 7.7] This includes disclosures for each of the following categories: [IFRS 7.8]
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 Other balance sheet-related disclosures:
special disclosures about financial assets and financial liabilities designated to be measured at fair value through profit and loss, including disclosures about credit risk and market risk, changes in fair values attributable to these risks and the methods of measurement.[IFRS 7.9-11] reclassifications of financial instruments from one category to another (e.g. from fair value to amortised cost or vice versa) [IFRS 7.12-12A] information about financial assets pledged as collateral and about financial or non-financial assets held as collateral [IFRS 7.14-15] reconciliation of the allowance account for credit losses (bad debts) by class of financial assets[IFRS 7.16] information about compound financial instruments with multiple embedded derivatives [IFRS 7.17] breaches of terms of loan agreements [IFRS 7.18-19]
Statement of comprehensive income
Items of income, expense, gains, and losses, with separate disclosure of gains and losses from: [IFRS 7.20(a)]
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 measured 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.
Other income statement-related disclosures:
total interest income and total interest expense for those financial instruments that are not measured at fair value through profit and loss [IFRS 7.20(b)] fee income and expense [IFRS 7.20(c)] amount of impairment losses by class of financial assets [IFRS 7.20(e)] interest income on impaired financial assets [IFRS 7.20(d)]
Other disclosures
Accounting policies for financial instruments [IFRS 7.21] Information about hedge accounting, including: [IFRS 7.22]
description of each hedge, hedging instrument, and fair values of those instruments, and nature of risks being hedged for cash flow hedges, the periods in which the cash flows are expected to occur, when they are expected to enter into the determination of profit or loss, and a description of any forecast transaction for which hedge accounting had previously been used but which is no longer expected to occur if a gain or loss on a hedging instrument in a cash flow hedge has been recognised in other comprehensive income, an entity should disclose the following: [IAS 7.23] the amount that was so recognised in other comprehensive income 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
Note: Where IFRS 9 Financial Instruments (2013) is applied, revised disclosure requirements apply. The required hedge accounting disclosures apply where the entity elects to adopt hedge accounting and require information to be provided in three broad categories: (1) the entity’s risk management strategy and how it is applied to manage risk (2) how the entity’s hedging activities may affect the amount, timing and uncertainty of its future cash flows, and (3) the effect that hedge accounting has had on the entity’s statement of financial position, statement of comprehensive income and statement of changes in equity. The disclosures are required to be presented in a single note or separate section in its financial statements, although some information can be incorporated by reference. For fair value hedges, information about the fair value changes of the hedging instrument and the hedged item [IFRS 7.24(a)] Hedge ineffectiveness recognised in profit and loss (separately for cash flow hedges and hedges of a net investment in a foreign operation) [IFRS 7.24(b-c)] Information about the fair values of each class of financial asset and financial liability, along with: [IFRS 7.25-30]
comparable carrying amounts description of how fair value was determined the level of inputs used in determining fair value reconciliations of movements between levels of fair value measurement hierarchy additional disclosures for financial instruments whose fair value is determined using level 3 inputs including impacts on profit and loss, other comprehensive income and sensitivity analysis information if fair value cannot be reliably measured
The fair value hierarchy introduces 3 levels of inputs based on the lowest level of input significant to the overall fair value (IFRS 7.27A-27B):
Level 1 – quoted prices for similar instruments Level 2 – directly observable market inputs other than Level 1 inputs Level 3 – inputs not based on observable market data
Note that disclosure of fair values is not required when the carrying amount is a reasonable approximation of fair value, such as short-term trade receivables and payables, or for instruments whose fair value cannot be measured reliably. [IFRS 7.29(a)]
