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IFRS 7 IFRS 7 Financial Instruments: Disclosures Is Issued by The IFRS 7 IFRS 7 Financial Instruments: Disclosures is issued by the International Accounting Standards Board (the Board). IFRS Standards together with their accompanying documents are issued by the International Accounting Standards Board (the “Board”). Disclaimer: To the extent permitted by applicable law, the Board and the IFRS Foundation (Foundation) expressly disclaim all liability howsoever arising from this publication or any translation thereof whether in contract, tort or otherwise (including, but not limited to, liability for any negligent act or omission) to any person in respect of any claims or losses of any nature including direct, indirect, incidental or consequential loss, punitive damages, penalties or costs. Information contained in this publication does not constitute advice and should not be substituted for the services of an appropriately qualified professional. Copyright © IFRS Foundation All rights reserved. Reproduction and use rights are strictly limited. Contact the Foundation for further details at [email protected]. Copies of IASB publications may be obtained from the Foundation’s Publications Department. Please address publication and copyright matters to: IFRS Foundation Publications Department 30 Cannon Street, London, EC4M 6XH, United Kingdom. Tel: +44 (0)20 7332 2730 Fax: +44 (0)20 7332 2749 Email: [email protected] Web: www.ifrs.org The IFRS Foundation logo, the IASB logo, the IFRS for SMEs logo, the “Hexagon Device”, “IFRS Foundation”, “eIFRS”, “IAS”, “IASB”, “IFRS for SMEs”, “IASs”, “IFRS”, “IFRSs”, “International Accounting Standards” and “International Financial Reporting Standards”, “IFRIC” and “IFRS Taxonomy” are Trade Marks of the IFRS Foundation. © IFRS Foundation 1 Approval by the Board of IFRS 7 issued in August 2005 International Financial Reporting Standard 7 Financial Instruments: Disclosures was approved for issue by the fourteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Thomas E Jones Vice-Chairman Mary E Barth Hans-Georg Bruns Anthony T Cope Jan Engström Robert P Garnett Gilbert Gélard James J Leisenring Warren J McGregor Patricia L O’Malley John T Smith Geoffrey Whittington Tatsumi Yamada 2 © IFRS Foundation IFRS 7 Approval by the Board of Improving Disclosures about Financial Instruments (Amendments to IFRS 7) issued in March 2009 Improving Disclosures about Financial Instruments (Amendments to IFRS 7) was approved for issue by the fourteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Thomas E Jones Vice-Chairman Mary E Barth Stephen Cooper Philippe Danjou Jan Engström Robert P Garnett Gilbert Gélard Prabhakar Kalavacherla James J Leisenring Warren J McGregor John T Smith Tatsumi Yamada Wei-Guo Zhang © IFRS Foundation 3 IFRS 7 Approval by the Board of Disclosures—Transfers of Financial Assets (Amendments to IFRS 7) issued in October 2010 Disclosures—Transfers of Financial Assets (Amendments to IFRS 7) was approved for issue by the fourteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Stephen Cooper Philippe Danjou Jan Engström Patrick Finnegan Amaro Luiz de Oliveira Gomes Prabhakar Kalavacherla Elke König Patricia McConnell Warren J McGregor Paul Pacter John T Smith Tatsumi Yamada Wei-Guo Zhang © IFRS Foundation 4 IFRS 7 Approval by the Board of Mandatory Effective Date of IFRS 9 and Transition Disclosures (Amendments to IFRS 9 (2009), IFRS 9 (2010) and IFRS 7) issued in December 2011 Mandatory Effective Date of IFRS 7 and Transition Disclosures (Amendments to IFRS 9 (2009), IFRS 9 (2010) and IFRS 7) was approved for publication by fourteen of the fifteen members of the International Accounting Standards Board. Ms McConnell dissented from the issue of the amendments. Her dissenting opinion is set out after the Basis for Conclusions. Hans Hoogervorst Chairman Ian Mackintosh Vice-Chairman Stephen Cooper Philippe Danjou Jan Engström Patrick Finnegan Amaro Luiz de Oliveira Gomes Prabhakar Kalavacherla Elke König Patricia McConnell Takatsugu Ochi Paul Pacter Darrel Scott John T Smith Wei-Guo Zhang © IFRS Foundation 5 IFRS 7 Approval by the Board of Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011 Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) was approved for issue by the fifteen members of the International Accounting Standards Board. Hans Hoogervorst Chairman Ian Mackintosh Vice-Chairman Stephen Cooper Philippe Danjou Jan Engström Patrick Finnegan Amaro Luiz de Oliveira Gomes Prabhakar Kalavacherla Elke König Patricia McConnell Takatsugu Ochi Paul Pacter Darrel Scott John T Smith Wei-Guo Zhang 6 © IFRS Foundation IFRS 7 Approval by the Board of IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) issued in November 2013 IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) was approved for issue by fifteen of the sixteen members of the International Accounting Standards Board. Mr Finnegan dissented. His dissenting opinion is set out after the Basis for Conclusions. Hans Hoogervorst Chairman Ian Mackintosh Vice-Chairman Stephen Cooper Philippe Danjou Martin Edelmann Jan Engström Patrick Finnegan Amaro Luiz de Oliveira Gomes Gary Kabureck Prabhakar Kalavacherla Patricia McConnell Takatsugu Ochi Darrel Scott Chungwoo Suh Mary Tokar Wei-Guo Zhang © IFRS Foundation 7 IFRS 7 BC CONTENTS BASIS FOR CONCLUSIONS ON IFRS 7 FINANCIAL INSTRUMENTS: DISCLOSURES from paragraph INTRODUCTION BC1 SCOPE (PARAGRAPHS 3–5) BC6 The entities to which the IFRS applies BC6 Exemptions considered by the Board BC9 DISCLOSURES ABOUT THE SIGNIFICANCE OF FINANCIAL INSTRUMENTS FOR FINANCIAL POSITION AND PERFORMANCE (PARAGRAPHS 7–30, B4, B5) BC12 The principle (paragraph 7) BC13 Balance sheet disclosures (paragraphs 8–19 and B4) BC14 Offsetting financial assets and financial liabilities BC24A Income statement and equity (paragraph 20) BC33 Other disclosures—hedge accounting BC35A Other disclosures—fair value (paragraphs 25–30) BC36 DISCLOSURES ABOUT THE NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (PARAGRAPHS 31–42 AND B6–B28) BC40 Interaction between qualitative and quantitative disclosures (paragraph 32A) BC42A Location of disclosures of risks arising from financial instruments (paragraph B6) BC43 Quantitative disclosures (paragraphs 34–42 and B7–B28) BC47 Credit risk (paragraphs 36–38 and B9 and B10) BC49 Financial assets with renegotiated terms (paragraph 36(d)) BC54A Liquidity risk (paragraphs 34(a), 39, B10A and B11–B11F) BC57 Market risk (paragraphs 40–42 and B17–B28) BC59 Operational risk BC65 DISCLOSURES RELATING TO TRANSFERS OF FINANCIAL ASSETS BC65A Background BC65A Transferred financial assets that are not derecognised in their entirety BC65E Transferred financial assets that are derecognised in their entirety BC65I EFFECTIVE DATE AND TRANSITION (PARAGRAPHS 43–44) BC66 APPLICABILITY OF THE OFFSETTING AMENDMENTS TO IFRS 7 TO CONDENSED INTERIM FINANCIAL STATEMENTS (PARAGRAPH 44R) BC72B SUMMARY OF MAIN CHANGES FROM THE EXPOSURE DRAFT BC73 APPENDIX Amendments to Basis for Conclusions on other IFRSs 8 © IFRS Foundation IFRS 7 BC Basis for Conclusions on IFRS 7 Financial Instruments: Disclosures This Basis for Conclusions accompanies, but is not part of, IFRS 7. In this Basis for Conclusions the terminology has not been amended to reflect the changes made by IAS 1 Presentation of Financial Statements (as revised in 2007). The requirements of IAS 39 relating to classification and measurement of items within the scope of IAS 39 were relocated to IFRS 9 Financial Instruments, and IFRS 7 was amended accordingly. The text of this Basis for Conclusions has been amended for consistency with those changes. Introduction BC1 This Basis for Conclusions summarises the International Accounting Standards Board’s considerations in reaching the conclusions in IFRS 7 Financial Instruments: Disclosures. Individual Board members gave greater weight to some factors than to others. BC2 During the late 1990s, the need for a comprehensive review of IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions became apparent. The Board’s predecessor, the International Accounting Standards Committee (IASC), issued a number of Standards that addressed, more comprehensively, some of the topics previously addressed only for banks in IAS 30. Also, fundamental changes were taking place in the financial services industry and in the way in which financial institutions manage their activities and risk exposures. This made it increasingly difficult for users of banks’ financial statements to assess and compare their financial position and performance, their associated risk exposures, and their processes for measuring and managing those risks. BC3 In 1999 IASC added a project to its agenda to revise IAS 30 and in 2000 it appointed a steering committee. BC4 In 2001 the Board added this project to its agenda. To assist and advise it, the Board retained the IAS 30 steering committee, renamed the Financial Activities Advisory Committee (FAAC), as an expert advisory group. FAAC members had experience and expertise in banks, finance companies and insurance companies and included auditors, financial analysts, preparers and regulators. The FAAC’s role was: (a) to provide input from the perspective of preparers and auditors of financial statements of entities that have significant exposures to financial
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