8box Solutions Inc.

4_20230710_150500_0001

Contact Number: 09369340340
Email: sales@8box.solutions

IFRS 7 Financial Instruments: Disclosures

Table of Contents

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) and Disclosure of
Accounting Policies (issued February 2021).

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.

International Financial Reporting Standard 7
Financial Instruments: Disclosures


Objective


The objective of this IFRS is to require entities to provide disclosures in their
financial statements that enable users to evaluate:
(a) the significance of financial instruments for the entity’s financial
position and performance; and
(b) 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.
The principles in this IFRS complement the principles for recognising,
measuring and presenting financial assets and financial liabilities in IAS 32
Financial Instruments: Presentation and IFRS 9 Financial Instruments.


Scope


This IFRS shall be applied by all entities to all types of financial instruments,
except:
(a) those interests in subsidiaries, associates or joint ventures that are
accounted for in accordance with IFRS 10 Consolidated Financial
Statements, IAS 27 Separate Financial Statements or IAS 28 Investments in
Associates and Joint Ventures. However, in some cases, IFRS 10, IAS 27 or
IAS 28 require or permit an entity to account for an interest in a
subsidiary, associate or joint venture using IFRS 9; in those cases,
entities shall apply the requirements of this IFRS and, for those
measured at fair value, the requirements of IFRS 13 Fair Value
Measurement. Entities shall also apply this IFRS to all derivatives linked
to interests in subsidiaries, associates or joint ventures unless the
derivative meets the definition of an equity instrument in IAS 32.
(b) employers’ rights and obligations arising from employee benefit plans,
to which IAS 19 Employee Benefits applies.
(c) [deleted]
(d) insurance contracts as defined in IFRS 17 Insurance
Contracts or investment contracts with discretionary participation
features within the scope of IFRS 17. However, this IFRS applies to:
(i) derivatives that are embedded in contracts within the scope of
IFRS 17, if IFRS 9 requires the entity to account for them
separately.
(ii) investment components that are separated from contracts
within the scope of IFRS 17, if IFRS 17 requires such separation,
unless the separated investment component is an investment
contract with discretionary participation features.

(iii) an issuer’s rights and obligations arising under insurance
contracts that meet the definition of financial guarantee contracts,
if the issuer applies IFRS 9 in recognising and measuring the
contracts. However, the issuer shall apply IFRS 17 if the issuer
elects, in accordance with paragraph 7(e) of IFRS 17, to apply
IFRS 17 in recognising and measuring the contracts.
(iv) an entity’s rights and obligations that are financial instruments
arising under credit card contracts, or similar contracts that
provide credit or payment arrangements, that an entity issues
that meet the definition of an insurance contract if the entity
applies IFRS 9 to those rights and obligations in accordance
with paragraph 7(h) of IFRS 17 and paragraph 2.1(e)(iv) of
IFRS 9.
(v) an entity’s rights and obligations that are financial instruments
arising under insurance contracts that an entity issues that
limit the compensation for insured events to the amount
otherwise required to settle the policyholder’s obligation
created by the contract, if the entity elects, in accordance with
paragraph 8A of IFRS 17, to apply IFRS 9 instead of IFRS 17 to
such contracts.

(e) financial instruments, contracts and obligations under share-based
payment transactions to which IFRS 2 Share-based Payment applies,
except that this IFRS applies to contracts within the scope of IFRS 9.
(f) instruments that are required to be classified as equity instruments in
accordance with paragraphs 16A and 16B or paragraphs 16C and 16D
of IAS 32.
This IFRS applies to recognised and unrecognised financial instruments.
Recognised financial instruments include financial assets and financial
liabilities that are within the scope of IFRS 9. Unrecognised financial
instruments include some financial instruments that, although outside the
scope of IFRS 9, are within the scope of this IFRS.
This IFRS applies to contracts to buy or sell a non-financial item that are
within the scope of IFRS 9.
The credit risk disclosure requirements in paragraphs 35A–35N apply to those
rights that IFRS 15 Revenue from Contracts with Customers specifies are accounted
for in accordance with IFRS 9 for the purposes of recognising impairment
gains or losses. Any reference to financial assets or financial instruments in
these paragraphs shall include those rights unless otherwise specified.


Classes of financial instruments and level of disclosure


When this IFRS requires disclosures by class of financial instrument, an entity
shall group financial instruments into classes that are appropriate to the
nature of the information disclosed and that take into account the
characteristics of those financial instruments. An entity shall provide sufficient information to permit reconciliation to the line items presented in
the statement of financial position.


Significance of financial instruments for financial position and
performance


An entity shall disclose information that enables users of its financial
statements to evaluate the significance of financial instruments for its
financial position and performance.


Statement of financial position


Categories of financial assets and financial liabilities


The carrying amounts of each of the following categories, as specified in
IFRS 9, shall be disclosed either in the statement of financial position or in the
notes:
(a) financial assets measured at fair value through profit or loss, showing
separately (i) those designated as such upon initial recognition or
subsequently in accordance with paragraph 6.7.1 of IFRS 9; (ii) those
measured as such in accordance with the election in paragraph 3.3.5 of
IFRS 9; (iii) those measured as such in accordance with the election in
paragraph 33A of IAS 32 and (iv) those mandatorily measured at fair
value through profit or loss in accordance with IFRS 9.
(b)–(d) [deleted]
(e) financial liabilities at fair value through profit or loss, showing
separately (i) those designated as such upon initial recognition or
subsequently in accordance with paragraph 6.7.1 of IFRS 9 and (ii)
those that meet the definition of held for trading in IFRS 9.
(f) financial assets measured at amortised cost.
(g) financial liabilities measured at amortised cost.
(h) financial assets measured at fair value through other comprehensive
income, showing separately (i) financial assets that are measured at
fair value through other comprehensive income in accordance with
paragraph 4.1.2A of IFRS 9; and (ii) investments in equity instruments
designated as such upon initial recognition in accordance with
paragraph 5.7.5 of IFRS 9.


Financial assets or financial liabilities at fair value through profit or
loss


If the entity has designated as measured at fair value through profit or loss a
financial asset (or group of financial assets) that would otherwise be measured
at fair value through other comprehensive income or amortised cost, it shall
disclose:

(a) the maximum exposure to credit risk (see paragraph 36(a)) of the
financial asset (or group of financial assets) at the end of the reporting
period.
(b) the amount by which any related credit derivatives or similar
instruments mitigate that maximum exposure to credit risk (see
paragraph 36(b)).
(c) the amount of change, during the period and cumulatively, in the fair
value of the financial asset (or group of financial assets) that is
attributable to changes in the credit risk of the financial asset
determined either:
(i) as the amount of change in its fair value that is not attributable
to changes in market conditions that give rise to market risk; or
(ii) using an alternative method the entity believes more faithfully
represents the amount of change in its fair value that is
attributable to changes in the credit risk of the asset.
Changes in market conditions that give rise to market risk include
changes in an observed (benchmark) interest rate, commodity price,
foreign exchange rate or index of prices or rates.
(d) the amount of the change in the fair value of any related credit
derivatives or similar instruments that has occurred during the period
and cumulatively since the financial asset was designated.
If the entity has designated a financial liability as at fair value through profit
or loss in accordance with paragraph 4.2.2 of IFRS 9 and is required to present
the effects of changes in that liability’s credit risk in other comprehensive
income (see paragraph 5.7.7 of IFRS 9), it shall disclose:
(a) the amount of change, cumulatively, in the fair value of the financial
liability that is attributable to changes in the credit risk of that liability
(see paragraphs B5.7.13–B5.7.20 of IFRS 9 for guidance on determining
the effects of changes in a liability’s credit risk).
(b) the difference between the financial liability’s carrying amount and
the amount the entity would be contractually required to pay at
maturity to the holder of the obligation.
(c) any transfers of the cumulative gain or loss within equity during the
period including the reason for such transfers.
(d) if a liability is derecognised during the period, the amount (if any)
presented in other comprehensive income that was realised at
derecognition.
If an entity has designated a financial liability as at fair value through profit
or loss in accordance with paragraph 4.2.2 of IFRS 9 and is required to present
all changes in the fair value of that liability (including the effects of changes
in the credit risk of the liability) in profit or loss (see paragraphs 5.7.7 and
5.7.8 of IFRS 9), it shall disclose:

(a) the amount of change, during the period and cumulatively, in the fair
value of the financial liability that is attributable to changes in the
credit risk of that liability (see paragraphs B5.7.13–B5.7.20 of IFRS 9 for
guidance on determining the effects of changes in a liability’s credit
risk); and
(b) the difference between the financial liability’s carrying amount and
the amount the entity would be contractually required to pay at
maturity to the holder of the obligation.
The entity shall also disclose:
(a) a detailed description of the methods used to comply with the
requirements in paragraphs 9(c), 10(a) and 10A(a) and
paragraph 5.7.7(a) of IFRS 9, including an explanation of why the
method is appropriate.
(b) if the entity believes that the disclosure it has given, either in the
statement of financial position or in the notes, to comply with the
requirements in paragraph 9(c), 10(a) or 10A(a) or paragraph 5.7.7(a) of
IFRS 9 does not faithfully represent the change in the fair value of the
financial asset or financial liability attributable to changes in its credit
risk, the reasons for reaching this conclusion and the factors it believes
are relevant.
(c) a detailed description of the methodology or methodologies used to
determine whether presenting the effects of changes in a liability’s
credit risk in other comprehensive income would create or enlarge an
accounting mismatch in profit or loss (see paragraphs 5.7.7 and 5.7.8
of IFRS 9). If an entity is required to present the effects of changes in a
liability’s credit risk in profit or loss (see paragraph 5.7.8 of IFRS 9), the
disclosure must include a detailed description of the economic
relationship described in paragraph B5.7.6 of IFRS 9.


Investments in equity instruments designated at fair value through
other comprehensive income


If an entity has designated investments in equity instruments to be measured
at fair value through other comprehensive income, as permitted by
paragraph 5.7.5 of IFRS 9, it shall disclose:
(a) which investments in equity instruments have been designated to be
measured at fair value through other comprehensive income.
(b) the reasons for using this presentation alternative.
(c) the fair value of each such investment at the end of the reporting
period.
(d) dividends recognised during the period, showing separately those
related to investments derecognised during the reporting period and
those related to investments held at the end of the reporting period.
(e) any transfers of the cumulative gain or loss within equity during the
period including the reason for such transfers.

If an entity derecognised investments in equity instruments measured at fair
value through other comprehensive income during the reporting period, it
shall disclose:
(a) the reasons for disposing of the investments.
(b) the fair value of the investments at the date of derecognition.
(c) the cumulative gain or loss on disposal.


Reclassification


[Deleted]
An entity shall disclose if, in the current or previous reporting periods, it has
reclassified any financial assets in accordance with paragraph 4.4.1 of IFRS 9.
For each such event, an entity shall disclose:
(a) the date of reclassification.
(b) a detailed explanation of the change in business model and a
qualitative description of its effect on the entity’s financial statements.
(c) the amount reclassified into and out of each category.
For each reporting period following reclassification until derecognition, an
entity shall disclose for assets reclassified out of the fair value through profit
or loss category so that they are measured at amortised cost or fair value
through other comprehensive income in accordance with paragraph 4.4.1 of
IFRS 9:
(a) the effective interest rate determined on the date of reclassification;
and
(b) the interest revenue recognised.
If, since its last annual reporting date, an entity has reclassified financial
assets out of the fair value through other comprehensive income category so
that they are measured at amortised cost or out of the fair value through
profit or loss category so that they are measured at amortised cost or fair
value through other comprehensive income it shall disclose:
(a) the fair value of the financial assets at the end of the reporting period;
and
(b) the fair value gain or loss that would have been recognised in profit or
loss or other comprehensive income during the reporting period if the
financial assets had not been reclassified.
[Deleted]


Offsetting financial assets and financial liabilities


The disclosures in paragraphs 13B–13E supplement the other disclosure
requirements of this IFRS and are required for all recognised financial
instruments that are set off in accordance with paragraph 42 of IAS 32. These
disclosures also apply to recognised financial instruments that are subject to

an enforceable master netting arrangement or similar agreement, irrespective
of whether they are set off in accordance with paragraph 42 of IAS 32.
An entity shall disclose information to enable users of its financial statements
to evaluate the effect or potential effect of netting arrangements on the
entity’s financial position. This includes the effect or potential effect of rights
of set-off associated with the entity’s recognised financial assets and
recognised financial liabilities that are within the scope of paragraph 13A.
To meet the objective in paragraph 13B, an entity shall disclose, at the end of
the reporting period, the following quantitative information separately for
recognised financial assets and recognised financial liabilities that are within
the scope of paragraph 13A:
(a) the gross amounts of those recognised financial assets and recognised
financial liabilities;
(b) the amounts that are set off in accordance with the criteria
in paragraph 42 of IAS 32 when determining the net amounts
presented in the statement of financial position;
(c) the net amounts presented in the statement of financial position;
(d) the amounts subject to an enforceable master netting arrangement or
similar agreement that are not otherwise included in paragraph 13C(b),
including:
(i) amounts related to recognised financial instruments that do
not meet some or all of the offsetting criteria in paragraph 42
of IAS 32; and
(ii) amounts related to financial collateral (including cash
collateral); and

(e) the net amount after deducting the amounts in (d) from the amounts
in (c) above.
The information required by this paragraph shall be presented in a tabular
format, separately for financial assets and financial liabilities, unless another
format is more appropriate.
The total amount disclosed in accordance with paragraph 13C(d) for an
instrument shall be limited to the amount in paragraph 13C(c) for that
instrument.
An entity shall include a description in the disclosures of the rights of set-off
associated with the entity’s recognised financial assets and recognised
financial liabilities subject to enforceable master netting arrangements and
similar agreements that are disclosed in accordance with paragraph 13C(d),
including the nature of those rights.
If the information required by paragraphs 13B–13E is disclosed in more than
one note to the financial statements, an entity shall cross-refer between those
notes.

Collateral


An entity shall disclose:
(a) the carrying amount of financial assets it has pledged as collateral for
liabilities or contingent liabilities, including amounts that have been
reclassified in accordance with paragraph 3.2.23(a) of IFRS 9; and
(b) the terms and conditions relating to its pledge.
When an entity holds collateral (of financial or non-financial assets) and is
permitted to sell or repledge the collateral in the absence of default by the
owner of the collateral, it shall disclose:
(a) the fair value of the collateral held;
(b) the fair value of any such collateral sold or repledged, and whether the
entity has an obligation to return it; and
(c) the terms and conditions associated with its use of the collateral.


Allowance account for credit losses


[Deleted]
The carrying amount of financial assets measured at fair value through other
comprehensive income in accordance with paragraph 4.1.2A of IFRS 9 is not
reduced by a loss allowance and an entity shall not present the loss allowance
separately in the statement of financial position as a reduction of the carrying
amount of the financial asset. However, an entity shall disclose the loss
allowance in the notes to the financial statements.


Compound financial instruments with multiple embedded
derivatives


If an entity has issued an instrument that contains both a liability and an
equity component (see paragraph 28 of IAS 32) and the instrument has
multiple embedded derivatives whose values are interdependent (such as a
callable convertible debt instrument), it shall disclose the existence of those
features.


Defaults and breaches


For loans payable recognised at the end of the reporting period, an entity shall
disclose:
(a) details of any defaults during the period of principal, interest, sinking
fund, or redemption terms of those loans payable;
(b) the carrying amount of the loans payable in default at the end of the
reporting period; and
(c) whether the default was remedied, or the terms of the loans payable
were renegotiated, before the financial statements were authorised for
issue.

If, during the period, there were breaches of loan agreement terms other than
those described in paragraph 18, an entity shall disclose the same information
as required by paragraph 18 if those breaches permitted the lender to demand
accelerated repayment (unless the breaches were remedied, or the terms of
the loan were renegotiated, on or before the end of the reporting period).


Statement of comprehensive income


Items of income, expense, gains or losses


An entity shall disclose the following items of income, expense, gains or losses
either in the statement of comprehensive income or in the notes:
(a) net gains or net losses on:
(i) financial assets or financial liabilities measured at fair value
through profit or loss, showing separately those on financial
assets or financial liabilities designated as such upon initial
recognition or subsequently in accordance with paragraph 6.7.1
of IFRS 9, and those on financial assets or financial liabilities
that are mandatorily measured at fair value through profit or
loss in accordance with IFRS 9 (eg financial liabilities that meet
the definition of held for trading in IFRS 9). For financial
liabilities designated as at fair value through profit or loss, an
entity shall show separately the amount of gain or loss
recognised in other comprehensive income and the amount
recognised in profit or loss.
(ii)–(iv) [deleted]
(v) financial liabilities measured at amortised cost.
(vi) financial assets measured at amortised cost.
(vii) investments in equity instruments designated at fair value
through other comprehensive income in accordance with
paragraph 5.7.5 of IFRS 9.
(viii) financial assets measured at fair value through other
comprehensive income in accordance with paragraph 4.1.2A of
IFRS 9, showing separately the amount of gain or loss
recognised in other comprehensive income during the period
and the amount reclassified upon derecognition from
accumulated other comprehensive income to profit or loss for
the period.

(b) total interest revenue and total interest expense (calculated using the
effective interest method) for financial assets that are measured at
amortised cost or that are measured at fair value through other
comprehensive income in accordance with paragraph 4.1.2A of IFRS 9
(showing these amounts separately); or financial liabilities that are not
measured at fair value through profit or loss.

(c) fee income and expense (other than amounts included in determining
the effective interest rate) arising from:
(i) financial assets and financial liabilities that are not at fair value
through profit or loss; and
(ii) trust and other fiduciary activities that result in the holding or
investing of assets on behalf of individuals, trusts, retirement
benefit plans, and other institutions.

(d) [deleted]
(e) [deleted]
An entity shall disclose an analysis of the gain or loss recognised in the
statement of comprehensive income arising from the derecognition of
financial assets measured at amortised cost, showing separately gains and
losses arising from derecognition of those financial assets. This disclosure
shall include the reasons for derecognising those financial assets.


Other disclosures


Accounting policies


In accordance with paragraph 117 of IAS 1 Presentation of Financial Statements (as
revised in 2007), an entity discloses material accounting policy information.
Information about the measurement basis (or bases) for financial instruments
used in preparing the financial statements is expected to be material
accounting policy information.


Hedge accounting


An entity shall apply the disclosure requirements in paragraphs 21B–24F for
those risk exposures that an entity hedges and for which it elects to apply
hedge accounting. Hedge accounting disclosures shall provide information
about:
(a) an entity’s risk management strategy and how it is applied to manage
risk;
(b) how the entity’s hedging activities may affect the amount, timing and
uncertainty of its future cash flows; and
(c) 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.
An entity shall present the required disclosures in a single note or separate
section in its financial statements. However, an entity need not duplicate
information that is already presented elsewhere, provided that the
information is incorporated by cross-reference from the financial statements
to some other statement, such as a management commentary or risk report,
that is available to users of the financial statements on the same terms as the
financial statements and at the same time. Without the information
incorporated by cross-reference, the financial statements are incomplete.

When paragraphs 22A–24F require the entity to separate by risk category the
information disclosed, the entity shall determine each risk category on the
basis of the risk exposures an entity decides to hedge and for which hedge
accounting is applied. An entity shall determine risk categories consistently
for all hedge accounting disclosures.
To meet the objectives in paragraph 21A, an entity shall (except as otherwise
specified below) determine how much detail to disclose, how much emphasis
to place on different aspects of the disclosure requirements, the appropriate
level of aggregation or disaggregation, and whether users of financial
statements need additional explanations to evaluate the quantitative
information disclosed. However, an entity shall use the same level of
aggregation or disaggregation it uses for disclosure requirements of related
information in this IFRS and IFRS 13 Fair Value Measurement.
The risk management strategy
[Deleted]
An entity shall explain its risk management strategy for each risk category of
risk exposures that it decides to hedge and for which hedge accounting is
applied. This explanation should enable users of financial statements to
evaluate (for example):
(a) how each risk arises.
(b) how the entity manages each risk; this includes whether the entity
hedges an item in its entirety for all risks or hedges a risk component
(or components) of an item and why.
(c) the extent of risk exposures that the entity manages.
To meet the requirements in paragraph 22A, the information should include
(but is not limited to) a description of:
(a) the hedging instruments that are used (and how they are used) to
hedge risk exposures;
(b) how the entity determines the economic relationship between the
hedged item and the hedging instrument for the purpose of assessing
hedge effectiveness; and
(c) how the entity establishes the hedge ratio and what the sources of
hedge ineffectiveness are.
When an entity designates a specific risk component as a hedged item (see
paragraph 6.3.7 of IFRS 9) it shall provide, in addition to the disclosures
required by paragraphs 22A and 22B, qualitative or quantitative information
about:
(a) how the entity determined the risk component that is designated as
the hedged item (including a description of the nature of the
relationship between the risk component and the item as a whole); and

(b) how the risk component relates to the item in its entirety (for example,
the designated risk component historically covered on average
80 per cent of the changes in fair value of the item as a whole).
The amount, timing and uncertainty of future cash flows
[Deleted]
Unless exempted by paragraph 23C, an entity shall disclose by risk category
quantitative information to allow users of its financial statements to evaluate
the terms and conditions of hedging instruments and how they affect the
amount, timing and uncertainty of future cash flows of the entity.
To meet the requirement in paragraph 23A, an entity shall provide a
breakdown that discloses:
(a) a profile of the timing of the nominal amount of the hedging
instrument; and
(b) if applicable, the average price or rate (for example strike or forward
prices etc) of the hedging instrument.
In situations in which an entity frequently resets (ie discontinues and restarts)
hedging relationships because both the hedging instrument and the hedged
item frequently change (ie the entity uses a dynamic process in which both
the exposure and the hedging instruments used to manage that exposure do
not remain the same for long—such as in the example in paragraph B6.5.24(b)
of IFRS 9) the entity:
(a) is exempt from providing the disclosures required by paragraphs 23A
and 23B.
(b) shall disclose:
(i) information about what the ultimate risk management strategy
is in relation to those hedging relationships;
(ii) a description of how it reflects its risk management strategy by
using hedge accounting and designating those particular
hedging relationships; and
(iii) an indication of how frequently the hedging relationships are
discontinued and restarted as part of the entity’s process in
relation to those hedging relationships.

An entity shall disclose by risk category a description of the sources of hedge
ineffectiveness that are expected to affect the hedging relationship during its
term.
If other sources of hedge ineffectiveness emerge in a hedging relationship, an
entity shall disclose those sources by risk category and explain the resulting
hedge ineffectiveness.
For cash flow hedges, an entity shall disclose a description of any forecast
transaction for which hedge accounting had been used in the previous period,
but which is no longer expected to occur.

The effects of hedge accounting on financial position and performance
[Deleted]
An entity shall disclose, in a tabular format, the following amounts related to
items designated as hedging instruments separately by risk category for each
type of hedge (fair value hedge, cash flow hedge or hedge of a net investment
in a foreign operation):
(a) the carrying amount of the hedging instruments (financial assets
separately from financial liabilities);
(b) the line item in the statement of financial position that includes the
hedging instrument;
(c) the change in fair value of the hedging instrument used as the basis
for recognising hedge ineffectiveness for the period; and
(d) the nominal amounts (including quantities such as tonnes or cubic
metres) of the hedging instruments.
An entity shall disclose, in a tabular format, the following amounts related to
hedged items separately by risk category for the types of hedges as follows:
(a) for fair value hedges:
(i) the carrying amount of the hedged item recognised in the
statement of financial position (presenting assets separately
from liabilities);
(ii) the accumulated amount of fair value hedge adjustments on
the hedged item included in the carrying amount of the hedged
item recognised in the statement of financial position
(presenting assets separately from liabilities);
(iii) the line item in the statement of financial position that
includes the hedged item;
(iv) the change in value of the hedged item used as the basis for
recognising hedge ineffectiveness for the period; and
(v) the accumulated amount of fair value hedge adjustments
remaining in the statement of financial position for any hedged
items that have ceased to be adjusted for hedging gains and
losses in accordance with paragraph 6.5.10 of IFRS 9.
(b) for cash flow hedges and hedges of a net investment in a foreign
operation:
(i) the change in value of the hedged item used as the basis for
recognising hedge ineffectiveness for the period (ie for cash
flow hedges the change in value used to determine the
recognised hedge ineffectiveness in accordance with
paragraph 6.5.11(c) of IFRS 9);

(ii) the balances in the cash flow hedge reserve and the foreign
currency translation reserve for continuing hedges that are
accounted for in accordance with paragraphs 6.5.11 and
6.5.13(a) of IFRS 9; and
(iii) the balances remaining in the cash flow hedge reserve and the
foreign currency translation reserve from any hedging
relationships for which hedge accounting is no longer applied.
An entity shall disclose, in a tabular format, the following amounts separately
by risk category for the types of hedges as follows:
(a) for fair value hedges:
(i) hedge ineffectiveness—ie the difference between the hedging
gains or losses of the hedging instrument and the hedged item
—recognised in profit or loss (or other comprehensive income
for hedges of an equity instrument for which an entity has
elected to present changes in fair value in other comprehensive
income in accordance with paragraph 5.7.5 of IFRS 9); and
(ii) the line item in the statement of comprehensive income that
includes the recognised hedge ineffectiveness.

(b) for cash flow hedges and hedges of a net investment in a foreign
operation:
(i) hedging gains or losses of the reporting period that were
recognised in other comprehensive income;
(ii) hedge ineffectiveness recognised in profit or loss;
(iii) the line item in the statement of comprehensive income that
includes the recognised hedge ineffectiveness;
(iv) the amount reclassified from the cash flow hedge reserve or the
foreign currency translation reserve into profit or loss as a
reclassification adjustment (see IAS 1) (differentiating between
amounts for which hedge accounting had previously been used,
but for which the hedged future cash flows are no longer
expected to occur, and amounts that have been transferred
because the hedged item has affected profit or loss);
(v) the line item in the statement of comprehensive income that
includes the reclassification adjustment (see IAS 1); and
(vi) for hedges of net positions, the hedging gains or losses
recognised in a separate line item in the statement of
comprehensive income (see paragraph 6.6.4 of IFRS 9).
When the volume of hedging relationships to which the exemption in
paragraph 23C applies is unrepresentative of normal volumes during the
period (ie the volume at the reporting date does not reflect the volumes
during the period) an entity shall disclose that fact and the reason it believes
the volumes are unrepresentative.

An entity shall provide a reconciliation of each component of equity and an
analysis of other comprehensive income in accordance with IAS 1 that, taken
together:
(a) differentiates, at a minimum, between the amounts that relate to the
disclosures in paragraph 24C(b)(i) and (b)(iv) as well as the amounts
accounted for in accordance with paragraph 6.5.11(d)(i) and (d)(iii) of
IFRS 9;
(b) differentiates between the amounts associated with the time value of
options that hedge transaction related hedged items and the amounts
associated with the time value of options that hedge time-period
related hedged items when an entity accounts for the time value of an
option in accordance with paragraph 6.5.15 of IFRS 9; and
(c) differentiates between the amounts associated with forward elements
of forward contracts and the foreign currency basis spreads of
financial instruments that hedge transaction related hedged items, and
the amounts associated with forward elements of forward contracts
and the foreign currency basis spreads of financial instruments that
hedge time-period related hedged items when an entity accounts for
those amounts in accordance with paragraph 6.5.16 of IFRS 9.
An entity shall disclose the information required in paragraph 24E separately
by risk category. This disaggregation by risk may be provided in the notes to
the financial statements.
Option to designate a credit exposure as measured at fair value through
profit or loss
If an entity designated a financial instrument, or a proportion of it, as
measured at fair value through profit or loss because it uses a credit derivative
to manage the credit risk of that financial instrument it shall disclose:
(a) for credit derivatives that have been used to manage the credit risk of
financial instruments designated as measured at fair value through
profit or loss in accordance with paragraph 6.7.1 of IFRS 9, a
reconciliation of each of the nominal amount and the fair value at the
beginning and at the end of the period;
(b) the gain or loss recognised in profit or loss on designation of a
financial instrument, or a proportion of it, as measured at fair value
through profit or loss in accordance with paragraph 6.7.1 of IFRS 9;
and
(c) on discontinuation of measuring a financial instrument, or a
proportion of it, at fair value through profit or loss, that financial
instrument’s fair value that has become the new carrying amount in
accordance with paragraph 6.7.4 of IFRS 9 and the related nominal or
principal amount (except for providing comparative information in
accordance with IAS 1, an entity does not need to continue this
disclosure in subsequent periods).

Uncertainty arising from interest rate benchmark reform
For hedging relationships to which an entity applies the exceptions set out
in paragraphs 6.8.4–6.8.12 of IFRS 9 or paragraphs 102D–102N of IAS 39, an
entity shall disclose:
(a) the significant interest rate benchmarks to which the entity’s hedging
relationships are exposed;
(b) the extent of the risk exposure the entity manages that is directly
affected by the interest rate benchmark reform;
(c) how the entity is managing the process to transition to alternative
benchmark rates;
(d) a description of significant assumptions or judgements the entity made
in applying these paragraphs (for example, assumptions or judgements
about when the uncertainty arising from interest rate benchmark
reform is no longer present with respect to the timing and the amount
of the interest rate benchmark-based cash flows); and
(e) the nominal amount of the hedging instruments in those hedging
relationships.


Additional disclosures related to interest rate benchmark reform


To enable users of financial statements to understand the effect of interest
rate benchmark reform on an entity’s financial instruments and risk
management strategy, an entity shall disclose information about:
(a) the nature and extent of risks to which the entity is exposed arising
from financial instruments subject to interest rate benchmark reform,
and how the entity manages these risks; and
(b) the entity’s progress in completing the transition to alternative
benchmark rates, and how the entity is managing the transition.
To meet the objectives in paragraph 24I, an entity shall disclose:
(a) how the entity is managing the transition to alternative benchmark
rates, its progress at the reporting date and the risks to which it is
exposed arising from financial instruments because of the transition;
(b) disaggregated by significant interest rate benchmark subject to interest
rate benchmark reform, quantitative information about financial
instruments that have yet to transition to an alternative benchmark
rate as at the end of the reporting period, showing separately:
(i) non-derivative financial assets;
(ii) non-derivative financial liabilities; and
(iii) derivatives; and
(c) if the risks identified in paragraph 24J(a) have resulted in changes to
an entity’s risk management strategy (see paragraph 22A), a
description of these changes.

Fair value


Except as set out in paragraph 29, for each class of financial
assets and financial liabilities (see paragraph 6), an entity shall disclose
the fair value of that class of assets and liabilities in a way that permits it to be
compared with its carrying amount.
In disclosing fair values, an entity shall group financial assets and financial
liabilities into classes, but shall offset them only to the extent that their
carrying amounts are offset in the statement of financial position.
[Deleted]
In some cases, an entity does not recognise a gain or loss on initial recognition
of a financial asset or financial liability because the fair value is neither
evidenced by a quoted price in an active market for an identical asset or
liability (ie a Level 1 input) nor based on a valuation technique that uses only
data from observable markets (see paragraph B5.1.2A of IFRS 9). In such cases,
the entity shall disclose by class of financial asset or financial liability:
(a) its accounting policy for recognising in profit or loss the difference
between the fair value at initial recognition and the transaction price
to reflect a change in factors (including time) that market participants
would take into account when pricing the asset or liability (see
paragraph B5.1.2A(b) of IFRS 9).
(b) the aggregate difference yet to be recognised in profit or loss at the
beginning and end of the period and a reconciliation of changes in the
balance of this difference.
(c) why the entity concluded that the transaction price was not the best
evidence of fair value, including a description of the evidence that
supports the fair value.
Disclosures of fair value are not required:
(a) when the carrying amount is a reasonable approximation of fair value,
for example, for financial instruments such as short-term trade
receivables and payables; or
(b) [deleted]
(c) [deleted]
(d) for lease liabilities.
[Deleted]


Nature and extent of risks arising from financial instruments


An entity shall disclose information that enables users of its financial
statements to evaluate the nature and extent of risks arising from financial
instruments to which the entity is exposed at the end of the reporting
period.

The disclosures required by paragraphs 33–42 focus on the risks that arise
from financial instruments and how they have been managed. These risks
typically include, but are not limited to, credit risk, liquidity risk and market
risk.
Providing qualitative disclosures in the context of quantitative disclosures
enables users to link related disclosures and hence form an overall picture of
the nature and extent of risks arising from financial instruments. The
interaction between qualitative and quantitative disclosures contributes to
disclosure of information in a way that better enables users to evaluate an
entity’s exposure to risks.


Qualitative disclosures


For each type of risk arising from financial instruments, an entity shall
disclose:
(a) the exposures to risk and how they arise;
(b) its objectives, policies and processes for managing the risk and the
methods used to measure the risk; and
(c) any changes in (a) or (b) from the previous period.


Quantitative disclosures


For each type of risk arising from financial instruments, an entity shall
disclose:
(a) summary quantitative data about its exposure to that risk at the end of
the reporting period. This disclosure shall be based on the information
provided internally to key management personnel of the entity (as
defined in IAS 24 Related Party Disclosures), for example the entity’s
board of directors or chief executive officer.
(b) the disclosures required by paragraphs 35A–42, to the extent not
provided in accordance with (a).
(c) concentrations of risk if not apparent from the disclosures made in
accordance with (a) and (b).
If the quantitative data disclosed as at the end of the reporting period are
unrepresentative of an entity’s exposure to risk during the period, an entity
shall provide further information that is representative.


Credit risk


Scope and objectives
An entity shall apply the disclosure requirements in paragraphs 35F–35N to
financial instruments to which the impairment requirements in IFRS 9 are
applied. However:

(a) for trade receivables, contract assets and lease receivables,
paragraph 35J(a) applies to those trade receivables, contract assets or
lease receivables on which lifetime expected credit losses are
recognised in accordance with paragraph 5.5.15 of IFRS 9, if those
financial assets are modified while more than 30 days past due; and
(b) paragraph 35K(b) does not apply to lease receivables.
The credit risk disclosures made in accordance with paragraphs 35F–35N shall
enable users of financial statements to understand the effect of credit risk on
the amount, timing and uncertainty of future cash flows. To achieve this
objective, credit risk disclosures shall provide:
(a) information about an entity’s credit risk management practices and
how they relate to the recognition and measurement of expected credit
losses, including the methods, assumptions and information used to
measure expected credit losses;
(b) quantitative and qualitative information that allows users of financial
statements to evaluate the amounts in the financial statements arising
from expected credit losses, including changes in the amount of
expected credit losses and the reasons for those changes; and
(c) information about an entity’s credit risk exposure (ie the credit risk
inherent in an entity’s financial assets and commitments to extend
credit) including significant credit risk concentrations.
An entity need not duplicate information that is already presented elsewhere,
provided that the information is incorporated by cross-reference from the
financial statements to other statements, such as a management commentary
or risk report that is available to users of the financial statements on the same
terms as the financial statements and at the same time. Without the
information incorporated by cross-reference, the financial statements are
incomplete.
To meet the objectives in paragraph 35B, an entity shall (except as otherwise
specified) consider how much detail to disclose, how much emphasis to place
on different aspects of the disclosure requirements, the appropriate level of
aggregation or disaggregation, and whether users of financial statements need
additional explanations to evaluate the quantitative information disclosed.
If the disclosures provided in accordance with paragraphs 35F–35N are
insufficient to meet the objectives in paragraph 35B, an entity shall disclose
additional information that is necessary to meet those objectives.
The credit risk management practices
An entity shall explain its credit risk management practices and how they
relate to the recognition and measurement of expected credit losses. To meet
this objective an entity shall disclose information that enables users of
financial statements to understand and evaluate:

(a) how an entity determined whether the credit risk of financial
instruments has increased significantly since initial recognition,
including, if and how:
(i) financial instruments are considered to have low credit risk in
accordance with paragraph 5.5.10 of IFRS 9, including the
classes of financial instruments to which it applies; and
(ii) the presumption in paragraph 5.5.11 of IFRS 9, that there have
been significant increases in credit risk since initial recognition
when financial assets are more than 30 days past due, has been
rebutted;

(b) an entity’s definitions of default, including the reasons for selecting
those definitions;
(c) how the instruments were grouped if expected credit losses were
measured on a collective basis;
(d) how an entity determined that financial assets are credit-impaired
financial assets;
(e) an entity’s write-off policy, including the indicators that there is no
reasonable expectation of recovery and information about the policy
for financial assets that are written-off but are still subject to
enforcement activity; and
(f) how the requirements in paragraph 5.5.12 of IFRS 9 for the
modification of contractual cash flows of financial assets have been
applied, including how an entity:
(i) determines whether the credit risk on a financial asset that has
been modified while the loss allowance was measured at an
amount equal to lifetime expected credit losses, has improved
to the extent that the loss allowance reverts to being measured
at an amount equal to 12-month expected credit losses in
accordance with paragraph 5.5.5 of IFRS 9; and
(ii) monitors the extent to which the loss allowance on financial
assets meeting the criteria in (i) is subsequently remeasured at
an amount equal to lifetime expected credit losses in
accordance with paragraph 5.5.3 of IFRS 9.

An entity shall explain the inputs, assumptions and estimation techniques
used to apply the requirements in Section 5.5 of IFRS 9. For this purpose an
entity shall disclose:
(a) the basis of inputs and assumptions and the estimation techniques
used to:
(i) measure the 12-month and lifetime expected credit losses;
(ii) determine whether the credit risk of financial instruments has
increased significantly since initial recognition; and

(iii) determine whether a financial asset is a credit-impaired
financial asset.

(b) how forward-looking information has been incorporated into the
determination of expected credit losses, including the use of
macroeconomic information; and
(c) changes in the estimation techniques or significant assumptions made
during the reporting period and the reasons for those changes.
Quantitative and qualitative information about amounts arising from
expected credit losses
To explain the changes in the loss allowance and the reasons for those
changes, an entity shall provide, by class of financial instrument, a
reconciliation from the opening balance to the closing balance of the loss
allowance, in a table, showing separately the changes during the period for:
(a) the loss allowance measured at an amount equal to 12-month expected
credit losses;
(b) the loss allowance measured at an amount equal to lifetime expected
credit losses for:
(i) financial instruments for which credit risk has increased

significantly since initial recognition but that are not credit-
impaired financial assets;

(ii) financial assets that are credit-impaired at the reporting date
(but that are not purchased or originated credit-impaired); and
(iii) trade receivables, contract assets or lease receivables for which
the loss allowances are measured in accordance with
paragraph 5.5.15 of IFRS 9.

(c) financial assets that are purchased or originated credit-impaired. In
addition to the reconciliation, an entity shall disclose the total amount
of undiscounted expected credit losses at initial recognition on
financial assets initially recognised during the reporting period.
To enable users of financial statements to understand the changes in the loss
allowance disclosed in accordance with paragraph 35H, an entity shall provide
an explanation of how significant changes in the gross carrying amount of
financial instruments during the period contributed to changes in the loss
allowance. The information shall be provided separately for financial
instruments that represent the loss allowance as listed in paragraph 35H(a)–(c)
and shall include relevant qualitative and quantitative information. Examples
of changes in the gross carrying amount of financial instruments that
contributed to the changes in the loss allowance may include:
(a) changes because of financial instruments originated or acquired
during the reporting period;

(b) the modification of contractual cash flows on financial assets that do
not result in a derecognition of those financial assets in accordance
with IFRS 9;
(c) changes because of financial instruments that were derecognised
(including those that were written-off) during the reporting period;
and
(d) changes arising from whether the loss allowance is measured at an
amount equal to 12-month or lifetime expected credit losses.
To enable users of financial statements to understand the nature and effect of
modifications of contractual cash flows on financial assets that have not
resulted in derecognition and the effect of such modifications on the
measurement of expected credit losses, an entity shall disclose:
(a) the amortised cost before the modification and the net modification
gain or loss recognised for financial assets for which the contractual
cash flows have been modified during the reporting period while they
had a loss allowance measured at an amount equal to lifetime expected
credit losses; and
(b) the gross carrying amount at the end of the reporting period of
financial assets that have been modified since initial recognition at a
time when the loss allowance was measured at an amount equal to
lifetime expected credit losses and for which the loss allowance has
changed during the reporting period to an amount equal to 12-month
expected credit losses.
To enable users of financial statements to understand the effect of collateral
and other credit enhancements on the amounts arising from expected credit
losses, an entity shall disclose by class of financial instrument:
(a) the amount that best represents its maximum exposure to credit risk
at the end of the reporting period without taking account of any
collateral held or other credit enhancements (eg netting agreements
that do not qualify for offset in accordance with IAS 32).
(b) a narrative description of collateral held as security and other credit
enhancements, including:
(i) a description of the nature and quality of the collateral held;
(ii) an explanation of any significant changes in the quality of that
collateral or credit enhancements as a result of deterioration or
changes in the collateral policies of the entity during the
reporting period; and
(iii) information about financial instruments for which an entity
has not recognised a loss allowance because of the collateral.
(c) quantitative information about the collateral held as security and
other credit enhancements (for example, quantification of the extent
to which collateral and other credit enhancements mitigate credit risk)
for financial assets that are credit-impaired at the reporting date.

An entity shall disclose the contractual amount outstanding on financial
assets that were written off during the reporting period and are still subject to
enforcement activity.
Credit risk exposure
To enable users of financial statements to assess an entity’s credit risk
exposure and understand its significant credit risk concentrations, an entity
shall disclose, by credit risk rating grades, the gross carrying amount of financial
assets and the exposure to credit risk on loan commitments and financial
guarantee contracts. This information shall be provided separately for
financial instruments:
(a) for which the loss allowance is measured at an amount equal to
12-month expected credit losses;
(b) for which the loss allowance is measured at an amount equal to
lifetime expected credit losses and that are:
(i) financial instruments for which credit risk has increased

significantly since initial recognition but that are not credit-
impaired financial assets;

(ii) financial assets that are credit-impaired at the reporting date
(but that are not purchased or originated credit-impaired); and
(iii) trade receivables, contract assets or lease receivables for which
the loss allowances are measured in accordance with
paragraph 5.5.15 of IFRS 9.

(c) that are purchased or originated credit-impaired financial assets.
For trade receivables, contract assets and lease receivables to which an entity
applies paragraph 5.5.15 of IFRS 9, the information provided in accordance
with paragraph 35M may be based on a provision matrix (see
paragraph B5.5.35 of IFRS 9).
For all financial instruments within the scope of this IFRS, but to which the
impairment requirements in IFRS 9 are not applied, an entity shall disclose by
class of financial instrument:
(a) the amount that best represents its maximum exposure to credit risk
at the end of the reporting period without taking account of any
collateral held or other credit enhancements (eg netting agreements
that do not qualify for offset in accordance with IAS 32); this disclosure
is not required for financial instruments whose carrying amount best
represents the maximum exposure to credit risk.
(b) a description of collateral held as security and other credit
enhancements, and their financial effect (eg quantification of the
extent to which collateral and other credit enhancements mitigate
credit risk) in respect of the amount that best represents the maximum
exposure to credit risk (whether disclosed in accordance with (a) or
represented by the carrying amount of a financial instrument).

(c) [deleted]
(d) [deleted]
[Deleted]
Collateral and other credit enhancements obtained
When an entity obtains financial or non-financial assets during the period by
taking possession of collateral it holds as security or calling on other credit
enhancements (eg guarantees), and such assets meet the recognition criteria
in other IFRSs, an entity shall disclose for such assets held at the reporting
date:
(a) the nature and carrying amount of the assets; and
(b) when the assets are not readily convertible into cash, its policies for
disposing of such assets or for using them in its operations.


Liquidity risk


An entity shall disclose:
(a) a maturity analysis for non-derivative financial liabilities (including
issued financial guarantee contracts) that shows the remaining
contractual maturities.
(b) a maturity analysis for derivative financial liabilities. The maturity
analysis shall include the remaining contractual maturities for those
derivative financial liabilities for which contractual maturities are
essential for an understanding of the timing of the cash flows (see
paragraph B11B).
(c) a description of how it manages the liquidity risk inherent in (a) and
(b).


Market risk


Sensitivity analysis
Unless an entity complies with paragraph 41, it shall disclose:
(a) a sensitivity analysis for each type of market risk to which the entity is
exposed at the end of the reporting period, showing how profit or loss
and equity would have been affected by changes in the relevant risk
variable that were reasonably possible at that date;
(b) the methods and assumptions used in preparing the sensitivity
analysis; and
(c) changes from the previous period in the methods and assumptions
used, and the reasons for such changes.

If an entity prepares a sensitivity analysis, such as value-at-risk, that reflects
interdependencies between risk variables (eg interest rates and exchange
rates) and uses it to manage financial risks, it may use that sensitivity analysis
in place of the analysis specified in paragraph 40. The entity shall also
disclose:
(a) an explanation of the method used in preparing such a sensitivity
analysis, and of the main parameters and assumptions underlying the
data provided; and
(b) an explanation of the objective of the method used and of limitations
that may result in the information not fully reflecting the fair value of
the assets and liabilities involved.
Other market risk disclosures
When the sensitivity analyses disclosed in accordance with paragraph 40 or 41
are unrepresentative of a risk inherent in a financial instrument (for example
because the year-end exposure does not reflect the exposure during the year),
the entity shall disclose that fact and the reason it believes the sensitivity
analyses are unrepresentative.


Transfers of financial assets


The disclosure requirements in paragraphs 42B–42H relating to transfers of
financial assets supplement the other disclosure requirements of this IFRS. An
entity shall present the disclosures required by paragraphs 42B–42H in a
single note in its financial statements. An entity shall provide the required
disclosures for all transferred financial assets that are not derecognised and
for any continuing involvement in a transferred asset, existing at the
reporting date, irrespective of when the related transfer transaction occurred.
For the purposes of applying the disclosure requirements in those paragraphs,
an entity transfers all or a part of a financial asset (the transferred financial
asset) if, and only if, it either:
(a) transfers the contractual rights to receive the cash flows of that
financial asset; or
(b) retains the contractual rights to receive the cash flows of that financial
asset, but assumes a contractual obligation to pay the cash flows to one
or more recipients in an arrangement.
An entity shall disclose information that enables users of its financial
statements:
(a) to understand the relationship between transferred financial
assets that are not derecognised in their entirety and the associated
liabilities; and
(b) to evaluate the nature of, and risks associated with, the entity’s
continuing involvement in derecognised financial assets.

For the purposes of applying the disclosure requirements in paragraphs
42E–42H, an entity has continuing involvement in a transferred financial
asset if, as part of the transfer, the entity retains any of the contractual rights
or obligations inherent in the transferred financial asset or obtains any new
contractual rights or obligations relating to the transferred financial asset. For
the purposes of applying the disclosure requirements in paragraphs 42E–42H,
the following do not constitute continuing involvement:
(a) normal representations and warranties relating to fraudulent transfer
and concepts of reasonableness, good faith and fair dealings that could
invalidate a transfer as a result of legal action;
(b) forward, option and other contracts to reacquire the transferred
financial asset for which the contract price (or exercise price) is the fair
value of the transferred financial asset; or
(c) an arrangement whereby an entity retains the contractual rights to
receive the cash flows of a financial asset but assumes a contractual
obligation to pay the cash flows to one or more entities and the
conditions in paragraph 3.2.5(a)–(c) of IFRS 9 are met.


Transferred financial assets that are not derecognised in
their entirety


An entity may have transferred financial assets in such a way that part or all
of the transferred financial assets do not qualify for derecognition. To meet
the objectives set out in paragraph 42B(a), the entity shall disclose at each
reporting date for each class of transferred financial assets that are not
derecognised in their entirety:
(a) the nature of the transferred assets.
(b) the nature of the risks and rewards of ownership to which the entity is
exposed.
(c) a description of the nature of the relationship between the transferred
assets and the associated liabilities, including restrictions arising from
the transfer on the reporting entity’s use of the transferred assets.
(d) when the counterparty (counterparties) to the associated liabilities has
(have) recourse only to the transferred assets, a schedule that sets out
the fair value of the transferred assets, the fair value of the associated
liabilities and the net position (the difference between the fair value of
the transferred assets and the associated liabilities).
(e) when the entity continues to recognise all of the transferred assets, the
carrying amounts of the transferred assets and the associated
liabilities.
(f) when the entity continues to recognise the assets to the extent of its
continuing involvement (see paragraphs 3.2.6(c)(ii) and 3.2.16 of
IFRS 9), the total carrying amount of the original assets before the
transfer, the carrying amount of the assets that the entity continues to
recognise, and the carrying amount of the associated liabilities.

Transferred financial assets that are derecognised in their
entirety


To meet the objectives set out in paragraph 42B(b), when an entity
derecognises transferred financial assets in their entirety (see
paragraph 3.2.6(a) and (c)(i) of IFRS 9) but has continuing involvement in them,
the entity shall disclose, as a minimum, for each type of continuing
involvement at each reporting date:
(a) the carrying amount of the assets and liabilities that are recognised in
the entity’s statement of financial position and represent the entity’s
continuing involvement in the derecognised financial assets, and the
line items in which the carrying amount of those assets and liabilities
are recognised.
(b) the fair value of the assets and liabilities that represent the entity’s
continuing involvement in the derecognised financial assets.
(c) the amount that best represents the entity’s maximum exposure to
loss from its continuing involvement in the derecognised financial
assets, and information showing how the maximum exposure to loss is
determined.
(d) the undiscounted cash outflows that would or may be required to
repurchase derecognised financial assets (eg the strike price in an
option agreement) or other amounts payable to the transferee in
respect of the transferred assets. If the cash outflow is variable then
the amount disclosed should be based on the conditions that exist at
each reporting date.
(e) a maturity analysis of the undiscounted cash outflows that would or
may be required to repurchase the derecognised financial assets or
other amounts payable to the transferee in respect of the transferred
assets, showing the remaining contractual maturities of the entity’s
continuing involvement.
(f) qualitative information that explains and supports the quantitative
disclosures required in (a)–(e).
An entity may aggregate the information required by paragraph 42E in respect
of a particular asset if the entity has more than one type of continuing
involvement in that derecognised financial asset, and report it under one type
of continuing involvement.
In addition, an entity shall disclose for each type of continuing involvement:
(a) the gain or loss recognised at the date of transfer of the assets.
(b) income and expenses recognised, both in the reporting period and
cumulatively, from the entity’s continuing involvement in the
derecognised financial assets (eg fair value changes in derivative
instruments).

(c) if the total amount of proceeds from transfer activity (that qualifies for
derecognition) in a reporting period is not evenly distributed
throughout the reporting period (eg if a substantial proportion of the
total amount of transfer activity takes place in the closing days of a
reporting period):
(i) when the greatest transfer activity took place within that
reporting period (eg the last five days before the end of the
reporting period),
(ii) the amount (eg related gains or losses) recognised from transfer
activity in that part of the reporting period, and
(iii) the total amount of proceeds from transfer activity in that part
of the reporting period.

An entity shall provide this information for each period for which a statement
of comprehensive income is presented.


Supplementary information


An entity shall disclose any additional information that it considers necessary
to meet the disclosure objectives in paragraph 42B.


Initial application of IFRS 9


In the reporting period that includes the date of initial application of IFRS 9,
the entity shall disclose the following information for each class of financial
assets and financial liabilities as at the date of initial application:
(a) the original measurement category and carrying amount determined
in accordance with IAS 39 or in accordance with a previous version of
IFRS 9 (if the entity’s chosen approach to applying IFRS 9 involves
more than one date of initial application for different requirements);
(b) the new measurement category and carrying amount determined in
accordance with IFRS 9;
(c) the amount of any financial assets and financial liabilities in the
statement of financial position that were previously designated as
measured at fair value through profit or loss but are no longer so
designated, distinguishing between those that IFRS 9 requires an entity
to reclassify and those that an entity elects to reclassify at the date of
initial application.
In accordance with paragraph 7.2.2 of IFRS 9, depending on the entity’s
chosen approach to applying IFRS 9, the transition can involve more than one
date of initial application. Therefore this paragraph may result in disclosure
on more than one date of initial application. An entity shall present these
quantitative disclosures in a table unless another format is more appropriate.
In the reporting period that includes the date of initial application of IFRS 9,
an entity shall disclose qualitative information to enable users to understand: 

(a) how it applied the classification requirements in IFRS 9 to those
financial assets whose classification has changed as a result of applying
IFRS 9.
(b) the reasons for any designation or de-designation of financial assets or
financial liabilities as measured at fair value through profit or loss at
the date of initial application.
In accordance with paragraph 7.2.2 of IFRS 9, depending on the entity’s
chosen approach to applying IFRS 9, the transition can involve more than one
date of initial application. Therefore this paragraph may result in disclosure
on more than one date of initial application.
In the reporting period that an entity first applies the classification and
measurement requirements for financial assets in IFRS 9 (ie when the entity
transitions from IAS 39 to IFRS 9 for financial assets), it shall present the
disclosures set out in paragraphs 42L–42O of this IFRS as required by
paragraph 7.2.15 of IFRS 9.
When required by paragraph 42K, an entity shall disclose the changes in the
classifications of financial assets and financial liabilities as at the date of
initial application of IFRS 9, showing separately:
(a) the changes in the carrying amounts on the basis of their
measurement categories in accordance with IAS 39 (ie not resulting
from a change in measurement attribute on transition to IFRS 9); and
(b) the changes in the carrying amounts arising from a change in
measurement attribute on transition to IFRS 9.
The disclosures in this paragraph need not be made after the annual reporting
period in which the entity initially applies the classification and measurement
requirements for financial assets in IFRS 9.
When required by paragraph 42K, an entity shall disclose the following for
financial assets and financial liabilities that have been reclassified so that they
are measured at amortised cost and, in the case of financial assets, that have
been reclassified out of fair value through profit or loss so that they are
measured at fair value through other comprehensive income, as a result of the
transition to IFRS 9:
(a) the fair value of the financial assets or financial liabilities at the end of
the reporting period; and
(b) the fair value gain or loss that would have been recognised in profit or
loss or other comprehensive income during the reporting period if the
financial assets or financial liabilities had not been reclassified.
The disclosures in this paragraph need not be made after the annual reporting
period in which the entity initially applies the classification and measurement
requirements for financial assets in IFRS 9.
When required by paragraph 42K, an entity shall disclose the following for
financial assets and financial liabilities that have been reclassified out of the
fair value through profit or loss category as a result of the transition to IFRS 9:

(a) the effective interest rate determined on the date of initial application;
and
(b) the interest revenue or expense recognised.
If an entity treats the fair value of a financial asset or a financial liability as
the new gross carrying amount at the date of initial application (see
paragraph 7.2.11 of IFRS 9), the disclosures in this paragraph shall be made for
each reporting period until derecognition. Otherwise, the disclosures in this
paragraph need not be made after the annual reporting period in which the
entity initially applies the classification and measurement requirements for
financial assets in IFRS 9.
When an entity presents the disclosures set out in paragraphs 42K–42N, those
disclosures, and the disclosures in paragraph 25 of this IFRS, must permit
reconciliation between:
(a) the measurement categories presented in accordance with IAS 39 and
IFRS 9; and
(b) the class of financial instrument
as at the date of initial application.
On the date of initial application of Section 5.5 of IFRS 9, an entity is required
to disclose information that would permit the reconciliation of the ending
impairment allowances in accordance with IAS 39 and the provisions in
accordance with IAS 37 to the opening loss allowances determined in
accordance with IFRS 9. For financial assets, this disclosure shall be provided
by the related financial assets’ measurement categories in accordance with
IAS 39 and IFRS 9, and shall show separately the effect of the changes in the
measurement category on the loss allowance at that date.
In the reporting period that includes the date of initial application of IFRS 9,
an entity is not required to disclose the line item amounts that would have
been reported in accordance with the classification and measurement
requirements (which includes the requirements related to amortised cost
measurement of financial assets and impairment in Sections 5.4 and 5.5 of
IFRS 9) of:
(a) IFRS 9 for prior periods; and
(b) IAS 39 for the current period.
In accordance with paragraph 7.2.4 of IFRS 9, if it is impracticable (as defined
in IAS 8) at the date of initial application of IFRS 9 for an entity to assess a
modified time value of money element in accordance with paragraphs
B4.1.9B–B4.1.9D of IFRS 9 based on the facts and circumstances that existed at
the initial recognition of the financial asset, an entity shall assess the
contractual cash flow characteristics of that financial asset based on the facts
and circumstances that existed at the initial recognition of the financial asset
without taking into account the requirements related to the modification of
the time value of money element in paragraphs B4.1.9B–B4.1.9D of IFRS 9. An
entity shall disclose the carrying amount at the reporting date of the financial assets whose contractual cash flow characteristics have been assessed based on
the facts and circumstances that existed at the initial recognition of the
financial asset without taking into account the requirements related to the
modification of the time value of money element in paragraphs
B4.1.9B–B4.1.9D of IFRS 9 until those financial assets are derecognised.
In accordance with paragraph 7.2.5 of IFRS 9, if it is impracticable (as defined
in IAS 8) at the date of initial application for an entity to assess whether the
fair value of a prepayment feature was insignificant in accordance with
paragraphs B4.1.12(c) of IFRS 9 based on the facts and circumstances that
existed at the initial recognition of the financial asset, an entity shall assess
the contractual cash flow characteristics of that financial asset based on the
facts and circumstances that existed at the initial recognition of the financial
asset without taking into account the exception for prepayment features in
paragraph B4.1.12 of IFRS 9. An entity shall disclose the carrying amount at
the reporting date of the financial assets whose contractual cash flow
characteristics have been assessed based on the facts and circumstances that
existed at the initial recognition of the financial asset without taking into
account the exception for prepayment features in paragraph B4.1.12 of IFRS 9
until those financial assets are derecognised.


Effective date and transition


An entity shall apply this IFRS for annual periods beginning on or after
1 January 2007. Earlier application is encouraged. If an entity applies this IFRS
for an earlier period, it shall disclose that fact.
If an entity applies this IFRS for annual periods beginning before 1 January
2006, it need not present comparative information for the disclosures required
by paragraphs 31–42 about the nature and extent of risks arising from
financial instruments.
IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In
addition it amended paragraphs 20, 21, 23(c) and (d), 27(c) and B5 of
Appendix B. An entity shall apply those amendments for annual periods
beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007)
for an earlier period, the amendments shall be applied for that earlier period.
IFRS 3 (as revised in 2008) deleted paragraph 3(c). An entity shall apply that
amendment for annual periods beginning on or after 1 July 2009. If an entity
applies IFRS 3 (revised 2008) for an earlier period, the amendment shall also be
applied for that earlier period. However, the amendment does not apply to
contingent consideration that arose from a business combination for which
the acquisition date preceded the application of IFRS 3 (revised 2008). Instead,
an entity shall account for such consideration in accordance with paragraphs
65A–65E of IFRS 3 (as amended in 2010).

An entity shall apply the amendment in paragraph 3 for annual periods
beginning on or after 1 January 2009. If an entity applies Puttable Financial
Instruments and Obligations Arising on Liquidation (Amendments to IAS 32 and
IAS 1), issued in February 2008, for an earlier period, the amendment in
paragraph 3 shall be applied for that earlier period.
Paragraph 3(a) was amended by Improvements to IFRSs issued in May 2008. An
entity shall apply that amendment for annual periods beginning on or after
1 January 2009. Earlier application is permitted. If an entity applies the
amendment for an earlier period it shall disclose that fact and apply for that
earlier period the amendments to paragraph 1 of IAS 28, paragraph 1 of IAS 31
and paragraph 4 of IAS 32 issued in May 2008. An entity is permitted to apply
the amendment prospectively.
[Deleted]
[Deleted]
Improving Disclosures about Financial Instruments (Amendments to IFRS 7), issued
in March 2009, amended paragraphs 27, 39 and B11 and added paragraphs
27A, 27B, B10A and B11A–B11F. An entity shall apply those amendments for
annual periods beginning on or after 1 January 2009. An entity need not
provide the disclosures required by the amendments for:
(a) any annual or interim period, including any statement of financial
position, presented within an annual comparative period ending before
31 December 2009, or
(b) any statement of financial position as at the beginning of the earliest
comparative period as at a date before 31 December 2009.
Earlier application is permitted. If an entity applies the amendments for an
earlier period, it shall disclose that fact.1
[Deleted]
Paragraph 44B was amended by Improvements to IFRSs issued in May 2010. An
entity shall apply that amendment for annual periods beginning on or after
1 July 2010. Earlier application is permitted.
Improvements to IFRSs issued in May 2010 added paragraph 32A and
amended paragraphs 34 and 36–38. An entity shall apply those amendments
for annual periods beginning on or after 1 January 2011. Earlier application is
permitted. If an entity applies the amendments for an earlier period it shall
disclose that fact.
Disclosures—Transfers of Financial Assets (Amendments to IFRS 7), issued in
October 2010, deleted paragraph 13 and added paragraphs 42A–42H and
B29–B39. An entity shall apply those amendments for annual periods
beginning on or after 1 July 2011. Earlier application is permitted. If an entity applies the amendments from an earlier date, it shall disclose that fact. An
entity need not provide the disclosures required by those amendments for any
period presented that begins before the date of initial application of the
amendments.
[Deleted]
IFRS 10 and IFRS 11 Joint Arrangements, issued in May 2011, amended
paragraph 3. An entity shall apply that amendment when it applies IFRS 10
and IFRS 11.
IFRS 13, issued in May 2011, amended paragraphs 3, 28 and 29 and
Appendix A and deleted paragraphs 27–27B. An entity shall apply those
amendments when it applies IFRS 13.
Presentation of Items of Other Comprehensive Income (Amendments to IAS 1), issued
in June 2011, amended paragraph 27B. An entity shall apply that amendment
when it applies IAS 1 as amended in June 2011.
Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to
IFRS 7), issued in December 2011, added paragraphs 13A–13F and B40–B53. An
entity shall apply those amendments for annual periods beginning on or after
1 January 2013. An entity shall provide the disclosures required by those
amendments retrospectively.
[Deleted]
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), issued in
October 2012, amended paragraph 3. An entity shall apply that amendment
for annual periods beginning on or after 1 January 2014. Earlier application of
Investment Entities is permitted. If an entity applies that amendment earlier it
shall also apply all amendments included in Investment Entities at the same
time.
[Deleted]
IFRS 9, as issued in July 2014, amended paragraphs 2–5, 8–11, 14, 20, 28–30,
36, 42C–42E, Appendix A and paragraphs B1, B5, B9, B10, B22 and B27, deleted
paragraphs 12, 12A, 16, 22–24, 37, 44E, 44F, 44H–44J, 44N, 44S–44W, 44Y, B4
and Appendix D and added paragraphs 5A, 10A, 11A, 11B, 12B–12D, 16A, 20A,
21A–21D, 22A–22C, 23A–23F, 24A–24G, 35A–35N, 42I–42S, 44ZA and
B8A–B8J. An entity shall apply those amendments when it applies IFRS 9.
Those amendments need not be applied to comparative information provided
for periods before the date of initial application of IFRS 9.
In accordance with paragraph 7.1.2 of IFRS 9, for annual reporting periods
prior to 1 January 2018, an entity may elect to early apply only the
requirements for the presentation of gains and losses on financial liabilities
designated as at fair value through profit or loss in paragraphs 5.7.1(c),
5.7.7–5.7.9, 7.2.14 and B5.7.5–B5.7.20 of IFRS 9 without applying the other
requirements in IFRS 9. If an entity elects to apply only those paragraphs of
IFRS 9, it shall disclose that fact and provide on an ongoing basis the related
disclosures set out in paragraphs 10–11 of this IFRS (as amended by IFRS 9
(2010)).

Annual Improvements to IFRSs 2012–2014 Cycle, issued in September 2014,
amended paragraphs 44R and B30 and added paragraph B30A. An entity shall
apply those amendments retrospectively in accordance with IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors for annual periods beginning
on or after 1 January 2016, except that an entity need not apply the
amendments to paragraphs B30 and B30A for any period presented that
begins before the annual period for which the entity first applies those
amendments. Earlier application of the amendments to paragraphs 44R, B30
and B30A is permitted. If an entity applies those amendments for an earlier
period it shall disclose that fact.
Disclosure Initiative (Amendments to IAS 1), issued in December 2014, amended
paragraphs 21 and B5. An entity shall apply those amendments for annual
periods beginning on or after 1 January 2016. Earlier application of those
amendments is permitted.
IFRS 16 Leases, issued in January 2016, amended paragraphs 29 and B11D. An
entity shall apply those amendments when it applies IFRS 16.
IFRS 17, issued in May 2017, amended paragraphs 3, 8 and 29 and deleted
paragraph 30. Amendments to IFRS 17, issued in June 2020, further amended
paragraph 3. An entity shall apply those amendments when it applies IFRS 17.
Interest Rate Benchmark Reform, which amended IFRS 9, IAS 39 and IFRS 7, issued
in September 2019, added paragraphs 24H and 44FF. An entity shall apply
these amendments when it applies the amendments to IFRS 9 or IAS 39.
In the reporting period in which an entity first applies Interest Rate Benchmark
Reform, issued in September 2019, an entity is not required to present the
quantitative information required by paragraph 28(f) of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors.
Interest Rate Benchmark Reform—Phase 2, which amended IFRS 9, IAS 39, IFRS 7,
IFRS 4 and IFRS 16, issued in August 2020, added paragraphs 24I–24J and
44HH. An entity shall apply these amendments when it applies the
amendments to IFRS 9, IAS 39, IFRS 4 or IFRS 16.
In the reporting period in which an entity first applies Interest Rate Benchmark
Reform—Phase 2, an entity is not required to disclose the information that
would otherwise be required by paragraph 28(f) of IAS 8.
Disclosure of Accounting Policies, which amends IAS 1 and IFRS Practice
Statement 2 Making Materiality Judgements, and was issued in February 2021,
amended paragraphs 21 and B5. An entity shall apply that amendment for
annual reporting periods beginning on or after 1 January 2023. Earlier
application is permitted. If an entity applies the amendment for an earlier
period, it shall disclose that fact.


Withdrawal of IAS 30


This IFRS supersedes IAS 30 Disclosures in the Financial Statements of Banks and
Similar Financial Institutions.

Appendix A
Defined terms


This appendix is an integral part of the IFRS.
credit risk The risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an
obligation.

credit risk rating
grades

Rating of credit risk based on the risk of a default occurring on
the financial instrument.

currency risk The risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign
exchange rates.

interest rate risk The risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest
rates.

liquidity risk The risk that an entity will encounter difficulty in meeting
obligations associated with financial liabilities that are settled
by delivering cash or another financial asset.

loans payable Loans payable are financial liabilities, other than short-term

trade payables on normal credit terms.

market risk The risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices.
Market risk comprises three types of risk: currency
risk, interest rate risk and other price risk.

other price risk The risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices
(other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to
the individual financial instrument or its issuer or by factors
affecting all similar financial instruments traded in the market.
The following terms are defined in paragraph 11 of IAS 32, paragraph 9 of
IAS 39, Appendix A of IFRS 9 or Appendix A of IFRS 13 and are used in this IFRS with the
meaning specified in IAS 32, IAS 39, IFRS 9 and IFRS 13.
• amortised cost of a financial asset or financial liability
• contract asset
• credit-impaired financial assets
• derecognition
• derivative
• dividends
• effective interest method

• equity instrument
• expected credit losses
• fair value
• financial asset
• financial guarantee contract
• financial instrument
• financial liability
• financial liability at fair value through profit or loss
• forecast transaction
• gross carrying amount of a financial asset
• hedging instrument
• held for trading
• impairment gains or losses
• loss allowance
• past due
• purchased or originated credit-impaired financial assets
• reclassification date
• regular way purchase or sale.

Appendix B
Application guidance


This appendix is an integral part of the IFRS.


Classes of financial instruments and level of disclosure
(paragraph 6)


Paragraph 6 requires an entity to group financial instruments into classes that
are appropriate to the nature of the information disclosed and that take into
account the characteristics of those financial instruments. The classes
described in paragraph 6 are determined by the entity and are, thus, distinct
from the categories of financial instruments specified in IFRS 9 (which
determine how financial instruments are measured and where changes in fair
value are recognised).
In determining classes of financial instrument, an entity shall, at a minimum:
(a) distinguish instruments measured at amortised cost from those
measured at fair value.
(b) treat as a separate class or classes those financial instruments outside
the scope of this IFRS.
An entity decides, in the light of its circumstances, how much detail it
provides to satisfy the requirements of this IFRS, how much emphasis it places
on different aspects of the requirements and how it aggregates information to
display the overall picture without combining information with different
characteristics. It is necessary to strike a balance between overburdening
financial statements with excessive detail that may not assist users of
financial statements and obscuring important information as a result of too
much aggregation. For example, an entity shall not obscure important
information by including it among a large amount of insignificant detail.
Similarly, an entity shall not disclose information that is so aggregated that it
obscures important differences between individual transactions or associated
risks.
[Deleted]


Other disclosure – accounting policies (paragraph 21)


Paragraph 21 requires disclosure of material accounting policy information,
which is expected to include information about the measurement basis (or
bases) for financial instruments used in preparing the financial statements.
For financial instruments, such disclosure may include:
(a) for financial liabilities designated as at fair value through profit or
loss:
(i) the nature of the financial liabilities the entity has designated
as at fair value through profit or loss;

(ii) the criteria for so designating such financial liabilities on initial
recognition; and
(iii) how the entity has satisfied the conditions in paragraph 4.2.2 of
IFRS 9 for such designation.

(aa) for financial assets designated as measured at fair value through profit
or loss:
(i) the nature of the financial assets the entity has designated as
measured at fair value through profit or loss; and
(ii) how the entity has satisfied the criteria in paragraph 4.1.5 of
IFRS 9 for such designation.

(b) [deleted]
(c) whether regular way purchases and sales of financial assets are
accounted for at trade date or at settlement date (see paragraph 3.1.2
of IFRS 9).
(d) [deleted]
(e) how net gains or net losses on each category of financial instrument
are determined (see paragraph 20(a)), for example, whether the net
gains or net losses on items at fair value through profit or loss include
interest or dividend income.
(f) [deleted]
(g) [deleted]
Paragraph 122 of IAS 1 (as revised in 2007) also requires entities to disclose,
along with material accounting policy information or other notes, the
judgements, apart from those involving estimations, that management has
made in the process of applying the entity’s accounting policies and that have
the most significant effect on the amounts recognised in the financial
statements.


Nature and extent of risks arising from financial instruments
(paragraphs 31–42)


The disclosures required by paragraphs 31–42 shall be either given in the
financial statements or incorporated by cross-reference from the financial
statements to some other statement, such as a management commentary or
risk report, that is available to users of the financial statements on the same
terms as the financial statements and at the same time. Without the
information incorporated by cross-reference, the financial statements are
incomplete.

Quantitative disclosures (paragraph 34)


Paragraph 34(a) requires disclosures of summary quantitative data about an
entity’s exposure to risks based on the information provided internally to key
management personnel of the entity. When an entity uses several methods to
manage a risk exposure, the entity shall disclose information using the
method or methods that provide the most relevant and reliable information.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors discusses
relevance and reliability.
Paragraph 34(c) requires disclosures about concentrations of risk.
Concentrations of risk arise from financial instruments that have similar
characteristics and are affected similarly by changes in economic or other
conditions. The identification of concentrations of risk requires judgement
taking into account the circumstances of the entity. Disclosure of
concentrations of risk shall include:
(a) a description of how management determines concentrations;
(b) a description of the shared characteristic that identifies each
concentration (eg counterparty, geographical area, currency or
market); and
(c) the amount of the risk exposure associated with all financial
instruments sharing that characteristic.


Credit risk management practices (paragraphs 35F–35G)


Paragraph 35F(b) requires the disclosure of information about how an entity
has defined default for different financial instruments and the reasons for
selecting those definitions. In accordance with paragraph 5.5.9 of IFRS 9, the
determination of whether lifetime expected credit losses should be recognised
is based on the increase in the risk of a default occurring since initial
recognition. Information about an entity’s definitions of default that will
assist users of financial statements in understanding how an entity has
applied the expected credit loss requirements in IFRS 9 may include:
(a) the qualitative and quantitative factors considered in defining default;
(b) whether different definitions have been applied to different types of
financial instruments; and
(c) assumptions about the cure rate (ie the number of financial assets that
return to a performing status) after a default occurred on the financial
asset.
To assist users of financial statements in evaluating an entity’s restructuring
and modification policies, paragraph 35F(f)(ii) requires the disclosure of
information about how an entity monitors the extent to which the loss
allowance on financial assets previously disclosed in accordance with
paragraph 35F(f)(i) are subsequently measured at an amount equal to lifetime
expected credit losses in accordance with paragraph 5.5.3 of IFRS 9.
Quantitative information that will assist users in understanding the
subsequent increase in credit risk of modified financial assets may include information about modified financial assets meeting the criteria in
paragraph 35F(f)(i) for which the loss allowance has reverted to being
measured at an amount equal to lifetime expected credit losses (ie a
deterioration rate).
Paragraph 35G(a) requires the disclosure of information about the basis of
inputs and assumptions and the estimation techniques used to apply the
impairment requirements in IFRS 9. An entity’s assumptions and inputs used
to measure expected credit losses or determine the extent of increases in
credit risk since initial recognition may include information obtained from
internal historical information or rating reports and assumptions about the
expected life of financial instruments and the timing of the sale of collateral.


Changes in the loss allowance (paragraph 35H)


In accordance with paragraph 35H, an entity is required to explain the reasons
for the changes in the loss allowance during the period. In addition to the
reconciliation from the opening balance to the closing balance of the loss
allowance, it may be necessary to provide a narrative explanation of the
changes. This narrative explanation may include an analysis of the reasons for
changes in the loss allowance during the period, including:
(a) the portfolio composition;
(b) the volume of financial instruments purchased or originated; and
(c) the severity of the expected credit losses.
For loan commitments and financial guarantee contracts the loss allowance is
recognised as a provision. An entity should disclose information about the
changes in the loss allowance for financial assets separately from those for
loan commitments and financial guarantee contracts. However, if a financial
instrument includes both a loan (ie financial asset) and an undrawn
commitment (ie loan commitment) component and the entity cannot
separately identify the expected credit losses on the loan commitment
component from those on the financial asset component, the expected credit
losses on the loan commitment should be recognised together with the loss
allowance for the financial asset. To the extent that the combined expected
credit losses exceed the gross carrying amount of the financial asset, the
expected credit losses should be recognised as a provision.


Collateral (paragraph 35K)


Paragraph 35K requires the disclosure of information that will enable users of
financial statements to understand the effect of collateral and other credit
enhancements on the amount of expected credit losses. An entity is neither
required to disclose information about the fair value of collateral and other
credit enhancements nor is it required to quantify the exact value of the
collateral that was included in the calculation of expected credit losses (ie the
loss given default).

A narrative description of collateral and its effect on amounts of expected
credit losses might include information about:
(a) the main types of collateral held as security and other credit
enhancements (examples of the latter being guarantees, credit
derivatives and netting agreements that do not qualify for offset in
accordance with IAS 32);
(b) the volume of collateral held and other credit enhancements and its
significance in terms of the loss allowance;
(c) the policies and processes for valuing and managing collateral and
other credit enhancements;
(d) the main types of counterparties to collateral and other credit
enhancements and their creditworthiness; and
(e) information about risk concentrations within the collateral and other
credit enhancements.


Credit risk exposure (paragraphs 35M–35N)


Paragraph 35M requires the disclosure of information about an entity’s credit
risk exposure and significant concentrations of credit risk at the reporting
date. A concentration of credit risk exists when a number of counterparties
are located in a geographical region or are engaged in similar activities and
have similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or
other conditions. An entity should provide information that enables users of
financial statements to understand whether there are groups or portfolios of
financial instruments with particular features that could affect a large portion
of that group of financial instruments such as concentration to particular
risks. This could include, for example, loan-to-value groupings, geographical,
industry or issuer-type concentrations.
The number of credit risk rating grades used to disclose the information in
accordance with paragraph 35M shall be consistent with the number that the
entity reports to key management personnel for credit risk management
purposes. If past due information is the only borrower-specific information
available and an entity uses past due information to assess whether credit risk
has increased significantly since initial recognition in accordance with
paragraph 5.5.11 of IFRS 9, an entity shall provide an analysis by past due
status for those financial assets.
When an entity has measured expected credit losses on a collective basis, the
entity may not be able to allocate the gross carrying amount of individual
financial assets or the exposure to credit risk on loan commitments and
financial guarantee contracts to the credit risk rating grades for which
lifetime expected credit losses are recognised. In that case, an entity should
apply the requirement in paragraph 35M to those financial instruments that
can be directly allocated to a credit risk rating grade and disclose separately
the gross carrying amount of financial instruments for which lifetime
expected credit losses have been measured on a collective basis.

Maximum credit risk exposure (paragraph 36(a))


Paragraphs 35K(a) and 36(a) require disclosure of the amount that best
represents the entity’s maximum exposure to credit risk. For a financial asset,
this is typically the gross carrying amount, net of:
(a) any amounts offset in accordance with IAS 32; and
(b) any loss allowance recognised in accordance with IFRS 9.
Activities that give rise to credit risk and the associated maximum exposure to
credit risk include, but are not limited to:
(a) granting loans to customers and placing deposits with other entities.
In these cases, the maximum exposure to credit risk is the carrying
amount of the related financial assets.
(b) entering into derivative contracts, eg foreign exchange contracts,
interest rate swaps and credit derivatives. When the resulting asset is
measured at fair value, the maximum exposure to credit risk at the
end of the reporting period will equal the carrying amount.
(c) granting financial guarantees. In this case, the maximum exposure to
credit risk is the maximum amount the entity could have to pay if the
guarantee is called on, which may be significantly greater than the
amount recognised as a liability.
(d) making a loan commitment that is irrevocable over the life of the
facility or is revocable only in response to a material adverse change. If
the issuer cannot settle the loan commitment net in cash or another
financial instrument, the maximum credit exposure is the full amount
of the commitment. This is because it is uncertain whether the
amount of any undrawn portion may be drawn upon in the future.
This may be significantly greater than the amount recognised as a
liability.


Quantitative liquidity risk disclosures (paragraphs 34(a)
and 39(a) and (b))


In accordance with paragraph 34(a) an entity discloses summary quantitative
data about its exposure to liquidity risk on the basis of the information
provided internally to key management personnel. An entity shall explain
how those data are determined. If the outflows of cash (or another financial
asset) included in those data could either:
(a) occur significantly earlier than indicated in the data, or
(b) be for significantly different amounts from those indicated in the data
(eg for a derivative that is included in the data on a net settlement
basis but for which the counterparty has the option to require gross
settlement),

the entity shall state that fact and provide quantitative information that
enables users of its financial statements to evaluate the extent of this risk
unless that information is included in the contractual maturity analyses
required by paragraph 39(a) or (b).
In preparing the maturity analyses required by paragraph 39(a) and (b), an
entity uses its judgement to determine an appropriate number of time bands.
For example, an entity might determine that the following time bands are
appropriate:
(a) not later than one month;
(b) later than one month and not later than three months;
(c) later than three months and not later than one year; and
(d) later than one year and not later than five years.
In complying with paragraph 39(a) and (b), an entity shall not separate an
embedded derivative from a hybrid (combined) financial instrument. For such
an instrument, an entity shall apply paragraph 39(a).
Paragraph 39(b) requires an entity to disclose a quantitative maturity analysis
for derivative financial liabilities that shows remaining contractual maturities
if the contractual maturities are essential for an understanding of the timing
of the cash flows. For example, this would be the case for:
(a) an interest rate swap with a remaining maturity of five years in a cash
flow hedge of a variable rate financial asset or liability.
(b) all loan commitments.
Paragraph 39(a) and (b) requires an entity to disclose maturity analyses for
financial liabilities that show the remaining contractual maturities for some
financial liabilities. In this disclosure:
(a) when a counterparty has a choice of when an amount is paid, the
liability is allocated to the earliest period in which the entity can be
required to pay. For example, financial liabilities that an entity can be
required to repay on demand (eg demand deposits) are included in the
earliest time band.
(b) when an entity is committed to make amounts available in
instalments, each instalment is allocated to the earliest period in
which the entity can be required to pay. For example, an undrawn loan
commitment is included in the time band containing the earliest date
it can be drawn down.
(c) for issued financial guarantee contracts the maximum amount of the
guarantee is allocated to the earliest period in which the guarantee
could be called.
The contractual amounts disclosed in the maturity analyses as required by
paragraph 39(a) and (b) are the contractual undiscounted cash flows, for
example:

(a) gross lease liabilities (before deducting finance charges);
(b) prices specified in forward agreements to purchase financial assets for
cash;
(c) net amounts for pay-floating/receive-fixed interest rate swaps for
which net cash flows are exchanged;
(d) contractual amounts to be exchanged in a derivative financial
instrument (eg a currency swap) for which gross cash flows are
exchanged; and
(e) gross loan commitments.
Such undiscounted cash flows differ from the amount included in the
statement of financial position because the amount in that statement is based
on discounted cash flows. When the amount payable is not fixed, the amount
disclosed is determined by reference to the conditions existing at the end of
the reporting period. For example, when the amount payable varies with
changes in an index, the amount disclosed may be based on the level of the
index at the end of the period.
Paragraph 39(c) requires an entity to describe how it manages the liquidity
risk inherent in the items disclosed in the quantitative disclosures required in
paragraph 39(a) and (b). An entity shall disclose a maturity analysis of
financial assets it holds for managing liquidity risk (eg financial assets that are
readily saleable or expected to generate cash inflows to meet cash outflows on
financial liabilities), if that information is necessary to enable users of its
financial statements to evaluate the nature and extent of liquidity risk.
Other factors that an entity might consider in providing the disclosure
required in paragraph 39(c) include, but are not limited to, whether the entity:
(a) has committed borrowing facilities (eg commercial paper facilities) or
other lines of credit (eg stand-by credit facilities) that it can access to
meet liquidity needs;
(b) holds deposits at central banks to meet liquidity needs;
(c) has very diverse funding sources;
(d) has significant concentrations of liquidity risk in either its assets or its
funding sources;
(e) has internal control processes and contingency plans for managing
liquidity risk;
(f) has instruments that include accelerated repayment terms (eg on the
downgrade of the entity’s credit rating);
(g) has instruments that could require the posting of collateral (eg margin
calls for derivatives);
(h) has instruments that allow the entity to choose whether it settles its
financial liabilities by delivering cash (or another financial asset) or by
delivering its own shares; or

(i) has instruments that are subject to master netting agreements.
[Deleted]


Market risk – sensitivity analysis (paragraphs 40 and 41)


Paragraph 40(a) requires a sensitivity analysis for each type of market risk to
which the entity is exposed. In accordance with paragraph B3, an entity
decides how it aggregates information to display the overall picture without
combining information with different characteristics about exposures to risks
from significantly different economic environments. For example:
(a) an entity that trades financial instruments might disclose this
information separately for financial instruments held for trading and
those not held for trading.
(b) an entity would not aggregate its exposure to market risks from areas
of hyperinflation with its exposure to the same market risks from
areas of very low inflation.
If an entity has exposure to only one type of market risk in only one economic
environment, it would not show disaggregated information.
Paragraph 40(a) requires the sensitivity analysis to show the effect on profit or
loss and equity of reasonably possible changes in the relevant risk variable
(eg prevailing market interest rates, currency rates, equity prices or
commodity prices). For this purpose:
(a) entities are not required to determine what the profit or loss for the
period would have been if relevant risk variables had been different.
Instead, entities disclose the effect on profit or loss and equity at the
end of the reporting period assuming that a reasonably possible
change in the relevant risk variable had occurred at the end of the
reporting period and had been applied to the risk exposures in
existence at that date. For example, if an entity has a floating rate
liability at the end of the year, the entity would disclose the effect on
profit or loss (ie interest expense) for the current year if interest rates
had varied by reasonably possible amounts.
(b) entities are not required to disclose the effect on profit or loss and
equity for each change within a range of reasonably possible changes
of the relevant risk variable. Disclosure of the effects of the changes at
the limits of the reasonably possible range would be sufficient.
In determining what a reasonably possible change in the relevant risk variable
is, an entity should consider:
(a) the economic environments in which it operates. A reasonably possible
change should not include remote or ‘worst case’ scenarios or ‘stress
tests’. Moreover, if the rate of change in the underlying risk variable is
stable, the entity need not alter the chosen reasonably possible change
in the risk variable. For example, assume that interest rates are 5 per
cent and an entity determines that a fluctuation in interest rates of
±50 basis points is reasonably possible. It would disclose the effect on profit or loss and equity if interest rates were to change to 4.5 per cent
or 5.5 per cent. In the next period, interest rates have increased to
5.5 per cent. The entity continues to believe that interest rates may
fluctuate by ±50 basis points (ie that the rate of change in interest rates
is stable). The entity would disclose the effect on profit or loss and
equity if interest rates were to change to 5 per cent or 6 per cent. The
entity would not be required to revise its assessment that interest rates
might reasonably fluctuate by ±50 basis points, unless there is
evidence that interest rates have become significantly more volatile.
(b) the time frame over which it is making the assessment. The sensitivity
analysis shall show the effects of changes that are considered to be
reasonably possible over the period until the entity will next present
these disclosures, which is usually its next annual reporting period.
Paragraph 41 permits an entity to use a sensitivity analysis that reflects
interdependencies between risk variables, such as a value-at-risk methodology,
if it uses this analysis to manage its exposure to financial risks. This applies
even if such a methodology measures only the potential for loss and does not
measure the potential for gain. Such an entity might comply with
paragraph 41(a) by disclosing the type of value-at-risk model used (eg whether
the model relies on Monte Carlo simulations), an explanation about how the
model works and the main assumptions (eg the holding period and confidence
level). Entities might also disclose the historical observation period and
weightings applied to observations within that period, an explanation of how
options are dealt with in the calculations, and which volatilities and
correlations (or, alternatively, Monte Carlo probability distribution
simulations) are used.
An entity shall provide sensitivity analyses for the whole of its business, but
may provide different types of sensitivity analysis for different classes of
financial instruments.


Interest rate risk


Interest rate risk arises on interest-bearing financial instruments recognised in
the statement of financial position (eg debt instruments acquired or issued)
and on some financial instruments not recognised in the statement of
financial position (eg some loan commitments).


Currency risk


Currency risk (or foreign exchange risk) arises on financial instruments that are
denominated in a foreign currency, ie in a currency other than the functional
currency in which they are measured. For the purpose of this IFRS, currency
risk does not arise from financial instruments that are non-monetary items or
from financial instruments denominated in the functional currency.
A sensitivity analysis is disclosed for each currency to which an entity has
significant exposure.

Other price risk


Other price risk arises on financial instruments because of changes in, for
example, commodity prices or equity prices. To comply with paragraph 40, an
entity might disclose the effect of a decrease in a specified stock market index,
commodity price, or other risk variable. For example, if an entity gives
residual value guarantees that are financial instruments, the entity discloses
an increase or decrease in the value of the assets to which the guarantee
applies.
Two examples of financial instruments that give rise to equity price risk are (a)
a holding of equities in another entity and (b) an investment in a trust that in
turn holds investments in equity instruments. Other examples include
forward contracts and options to buy or sell specified quantities of an equity
instrument and swaps that are indexed to equity prices. The fair values of
such financial instruments are affected by changes in the market price of the
underlying equity instruments.
In accordance with paragraph 40(a), the sensitivity of profit or loss (that arises,
for example, from instruments measured at fair value through profit or loss)
is disclosed separately from the sensitivity of other comprehensive income
(that arises, for example, from investments in equity instruments whose
changes in fair value are presented in other comprehensive income).
Financial instruments that an entity classifies as equity instruments are not
remeasured. Neither profit or loss nor equity will be affected by the equity
price risk of those instruments. Accordingly, no sensitivity analysis is
required.


Derecognition (paragraphs 42C–42H)


Continuing involvement (paragraph 42C)


The assessment of continuing involvement in a transferred financial asset for
the purposes of the disclosure requirements in paragraphs 42E–42H is made
at the level of the reporting entity. For example, if a subsidiary transfers to an
unrelated third party a financial asset in which the parent of the subsidiary
has continuing involvement, the subsidiary does not include the parent’s
involvement in the assessment of whether it has continuing involvement in
the transferred asset in its separate or individual financial statements (ie when
the subsidiary is the reporting entity). However, a parent would include its
continuing involvement (or that of another member of the group) in a
financial asset transferred by its subsidiary in determining whether it has
continuing involvement in the transferred asset in its consolidated financial
statements (ie when the reporting entity is the group).
An entity does not have a continuing involvement in a transferred financial
asset if, as part of the transfer, it neither retains any of the contractual rights
or obligations inherent in the transferred financial asset nor acquires any new
contractual rights or obligations relating to the transferred financial asset. An
entity does not have continuing involvement in a transferred financial asset if
it has neither an interest in the future performance of the transferred

financial asset nor a responsibility under any circumstances to make
payments in respect of the transferred financial asset in the future. The term
‘payment’ in this context does not include cash flows of the transferred
financial asset that an entity collects and is required to remit to the
transferee.
When an entity transfers a financial asset, the entity may retain the right to
service that financial asset for a fee that is included in, for example, a
servicing contract. The entity assesses the servicing contract in accordance
with the guidance in paragraphs 42C and B30 to decide whether the entity has
continuing involvement as a result of the servicing contract for the purposes
of the disclosure requirements. For example, a servicer will have continuing
involvement in the transferred financial asset for the purposes of the
disclosure requirements if the servicing fee is dependent on the amount or
timing of the cash flows collected from the transferred financial asset.
Similarly, a servicer has continuing involvement for the purposes of the

disclosure requirements if a fixed fee would not be paid in full because of non-
performance of the transferred financial asset. In these examples, the servicer

has an interest in the future performance of the transferred financial asset.
This assessment is independent of whether the fee to be received is expected
to compensate the entity adequately for performing the servicing.
Continuing involvement in a transferred financial asset may result from
contractual provisions in the transfer agreement or in a separate agreement
with the transferee or a third party entered into in connection with the
transfer.


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


Paragraph 42D requires disclosures when part or all of the transferred
financial assets do not qualify for derecognition. Those disclosures are
required at each reporting date at which the entity continues to recognise the
transferred financial assets, regardless of when the transfers occurred.


Types of continuing involvement (paragraphs 42E–42H)


Paragraphs 42E–42H require qualitative and quantitative disclosures for each
type of continuing involvement in derecognised financial assets. An entity
shall aggregate its continuing involvement into types that are representative
of the entity’s exposure to risks. For example, an entity may aggregate its
continuing involvement by type of financial instrument (eg guarantees or call
options) or by type of transfer (eg factoring of receivables, securitisations and
securities lending).

Maturity analysis for undiscounted cash outflows to
repurchase transferred assets (paragraph 42E(e))


Paragraph 42E(e) requires an entity to disclose a maturity analysis of the
undiscounted cash outflows to repurchase derecognised financial assets or
other amounts payable to the transferee in respect of the derecognised
financial assets, showing the remaining contractual maturities of the entity’s
continuing involvement. This analysis distinguishes cash flows that are
required to be paid (eg forward contracts), cash flows that the entity may be
required to pay (eg written put options) and cash flows that the entity might
choose to pay (eg purchased call options).
An entity shall use its judgement to determine an appropriate number of time
bands in preparing the maturity analysis required by paragraph 42E(e). For
example, an entity might determine that the following maturity time bands
are appropriate:
(a) not later than one month;
(b) later than one month and not later than three months;
(c) later than three months and not later than six months;
(d) later than six months and not later than one year;
(e) later than one year and not later than three years;
(f) later than three years and not later than five years; and
(g) more than five years.
If there is a range of possible maturities, the cash flows are included on the
basis of the earliest date on which the entity can be required or is permitted to
pay.


Qualitative information (paragraph 42E(f))


The qualitative information required by paragraph 42E(f) includes a
description of the derecognised financial assets and the nature and purpose of
the continuing involvement retained after transferring those assets. It also
includes a description of the risks to which an entity is exposed, including:
(a) a description of how the entity manages the risk inherent in its
continuing involvement in the derecognised financial assets.
(b) whether the entity is required to bear losses before other parties, and
the ranking and amounts of losses borne by parties whose interests
rank lower than the entity’s interest in the asset (ie its continuing
involvement in the asset).
(c) a description of any triggers associated with obligations to provide
financial support or to repurchase a transferred financial asset.

Gain or loss on derecognition (paragraph 42G(a))


Paragraph 42G(a) requires an entity to disclose the gain or loss on
derecognition relating to financial assets in which the entity has continuing
involvement. The entity shall disclose if a gain or loss on derecognition arose
because the fair values of the components of the previously recognised asset
(ie the interest in the asset derecognised and the interest retained by the
entity) were different from the fair value of the previously recognised asset as
a whole. In that situation, the entity shall also disclose whether the fair value
measurements included significant inputs that were not based on observable
market data, as described in paragraph 27A.


Supplementary information (paragraph 42H)


The disclosures required in paragraphs 42D–42G may not be sufficient to meet
the disclosure objectives in paragraph 42B. If this is the case, the entity shall
disclose whatever additional information is necessary to meet the disclosure
objectives. The entity shall decide, in the light of its circumstances, how much
additional information it needs to provide to satisfy the information needs of
users and how much emphasis it places on different aspects of the additional
information. It is necessary to strike a balance between burdening financial
statements with excessive detail that may not assist users of financial
statements and obscuring information as a result of too much aggregation.


Offsetting financial assets and financial liabilities
(paragraphs 13A–13F)


Scope (paragraph 13A)
The disclosures in paragraphs 13B–13E are required for all recognised
financial instruments that are set off in accordance with paragraph 42 of
IAS 32. In addition, financial instruments are within the scope of the
disclosure requirements in paragraphs 13B–13E if they are subject to an
enforceable master netting arrangement or similar agreement that covers
similar financial instruments and transactions, irrespective of whether the
financial instruments are set off in accordance with paragraph 42 of IAS 32.
The similar agreements referred to in paragraphs 13A and B40 include
derivative clearing agreements, global master repurchase agreements, global
master securities lending agreements, and any related rights to financial
collateral. The similar financial instruments and transactions referred to in
paragraph B40 include derivatives, sale and repurchase agreements, reverse
sale and repurchase agreements, securities borrowing, and securities lending
agreements. Examples of financial instruments that are not within the scope
of paragraph 13A are loans and customer deposits at the same institution
(unless they are set off in the statement of financial position), and financial
instruments that are subject only to a collateral agreement.

Disclosure of quantitative information for recognised financial
assets and recognised financial liabilities within the scope of
paragraph 13A (paragraph 13C)


Financial instruments disclosed in accordance with paragraph 13C may be
subject to different measurement requirements (for example, a payable
related to a repurchase agreement may be measured at amortised cost, while a
derivative will be measured at fair value). An entity shall include instruments
at their recognised amounts and describe any resulting measurement
differences in the related disclosures.


Disclosure of the gross amounts of recognised financial assets
and recognised financial liabilities within the scope of
paragraph 13A (paragraph 13C(a))


The amounts required by paragraph 13C(a) relate to recognised financial
instruments that are set off in accordance with paragraph 42 of IAS 32. The
amounts required by paragraph 13C(a) also relate to recognised financial
instruments that are subject to an enforceable master netting arrangement or
similar agreement irrespective of whether they meet the offsetting criteria.
However, the disclosures required by paragraph 13C(a) do not relate to any
amounts recognised as a result of collateral agreements that do not meet the
offsetting criteria in paragraph 42 of IAS 32. Instead, such amounts are
required to be disclosed in accordance with paragraph 13C(d).


Disclosure of the amounts that are set off in accordance with the
criteria in paragraph 42 of IAS 32 (paragraph 13C(b))


Paragraph 13C(b) requires that entities disclose the amounts set off in
accordance with paragraph 42 of IAS 32 when determining the net amounts
presented in the statement of financial position. The amounts of both the
recognised financial assets and the recognised financial liabilities that are
subject to set-off under the same arrangement will be disclosed in both the
financial asset and financial liability disclosures. However, the amounts
disclosed (in, for example, a table) are limited to the amounts that are subject
to set-off. For example, an entity may have a recognised derivative asset and a
recognised derivative liability that meet the offsetting criteria in paragraph 42
of IAS 32. If the gross amount of the derivative asset is larger than the gross
amount of the derivative liability, the financial asset disclosure table will
include the entire amount of the derivative asset (in accordance with
paragraph 13C(a)) and the entire amount of the derivative liability (in
accordance with paragraph 13C(b)). However, while the financial liability
disclosure table will include the entire amount of the derivative liability (in
accordance with paragraph 13C(a)), it will only include the amount of the
derivative asset (in accordance with paragraph 13C(b)) that is equal to the
amount of the derivative liability.

Disclosure of the net amounts presented in the statement of
financial position (paragraph 13C(c))


If an entity has instruments that meet the scope of these disclosures (as
specified in paragraph 13A), but that do not meet the offsetting criteria in
paragraph 42 of IAS 32, the amounts required to be disclosed by
paragraph 13C(c) would equal the amounts required to be disclosed by
paragraph 13C(a).
The amounts required to be disclosed by paragraph 13C(c) must be reconciled
to the individual line item amounts presented in the statement of financial
position. For example, if an entity determines that the aggregation or
disaggregation of individual financial statement line item amounts provides
more relevant information, it must reconcile the aggregated or disaggregated
amounts disclosed in paragraph 13C(c) back to the individual line item
amounts presented in the statement of financial position.


Disclosure of the amounts subject to an enforceable master
netting arrangement or similar agreement that are not otherwise
included in paragraph 13C(b) (paragraph 13C(d))


Paragraph 13C(d) requires that entities disclose amounts that are subject to an
enforceable master netting arrangement or similar agreement that are not
otherwise included in paragraph 13C(b). Paragraph 13C(d)(i) refers to amounts
related to recognised financial instruments that do not meet some or all of the
offsetting criteria in paragraph 42 of IAS 32 (for example, current rights of
set-off that do not meet the criterion in paragraph 42(b) of IAS 32, or
conditional rights of set-off that are enforceable and exercisable only in the
event of default, or only in the event of insolvency or bankruptcy of any of the
counterparties).
Paragraph 13C(d)(ii) refers to amounts related to financial collateral, including
cash collateral, both received and pledged. An entity shall disclose the fair
value of those financial instruments that have been pledged or received as
collateral. The amounts disclosed in accordance with paragraph 13C(d)(ii)
should relate to the actual collateral received or pledged and not to any
resulting payables or receivables recognised to return or receive back such
collateral.


Limits on the amounts disclosed in paragraph 13C(d)
(paragraph 13D)


When disclosing amounts in accordance with paragraph 13C(d), an entity
must take into account the effects of over-collateralisation by financial
instrument. To do so, the entity must first deduct the amounts disclosed in
accordance with paragraph 13C(d)(i) from the amount disclosed in accordance
with paragraph 13C(c). The entity shall then limit the amounts disclosed in
accordance with paragraph 13C(d)(ii) to the remaining amount in
paragraph 13C(c) for the related financial instrument. However, if rights to
collateral can be enforced across financial instruments, such rights can be
included in the disclosure provided in accordance with paragraph 13D.

Description of the rights of set-off subject to enforceable master
netting arrangements and similar agreements (paragraph 13E)


An entity shall describe the types of rights of set-off and similar arrangements
disclosed in accordance with paragraph 13C(d), including the nature of those
rights. For example, an entity shall describe its conditional rights. For
instruments subject to rights of set-off that are not contingent on a future
event but that do not meet the remaining criteria in paragraph 42 of IAS 32,
the entity shall describe the reason(s) why the criteria are not met. For any
financial collateral received or pledged, the entity shall describe the terms of
the collateral agreement (for example, when the collateral is restricted).


Disclosure by type of financial instrument or by counterparty


The quantitative disclosures required by paragraph 13C(a)–(e) may be grouped
by type of financial instrument or transaction (for example, derivatives,
repurchase and reverse repurchase agreements or securities borrowing and
securities lending agreements).
Alternatively, an entity may group the quantitative disclosures required by
paragraph 13C(a)–(c) by type of financial instrument, and the quantitative
disclosures required by paragraph 13C(c)–(e) by counterparty. If an entity
provides the required information by counterparty, the entity is not required
to identify the counterparties by name. However, designation of
counterparties (Counterparty A, Counterparty B, Counterparty C, etc) shall
remain consistent from year to year for the years presented to maintain
comparability. Qualitative disclosures shall be considered so that further
information can be given about the types of counterparties. When disclosure
of the amounts in paragraph 13C(c)–(e) is provided by counterparty, amounts
that are individually significant in terms of total counterparty amounts shall
be separately disclosed and the remaining individually insignificant
counterparty amounts shall be aggregated into one line item.


Other


The specific disclosures required by paragraphs 13C–13E are minimum
requirements. To meet the objective in paragraph 13B an entity may need to
supplement them with additional (qualitative) disclosures, depending on the
terms of the enforceable master netting arrangements and related
agreements, including the nature of the rights of set-off, and their effect or
potential effect on the entity’s financial position.

Appendix C
Amendments to other IFRSs


The amendments in this appendix shall be applied for annual periods beginning on or after 1 January
2007. If an entity applies this IFRS for an earlier period, these amendments shall be applied for that
earlier period.

* * * * *

The amendments contained in this appendix when this IFRS was issued in 2005 have been
incorporated into the text of the relevant IFRSs included in this volume.

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

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

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

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 9 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

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

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

Approval by the Board of Interest Rate Benchmark Reform issued
in September 2019


Interest Rate Benchmark Reform, which amended IFRS 9, IAS 39 and IFRS 7, was approved for
issue by all 14 members of the International Accounting Standards Board (Board).
Hans Hoogervorst Chairman
Suzanne Lloyd Vice-Chair
Nick Anderson
Tadeu Cendon
Martin Edelmann
Françoise Flores
Gary Kabureck
Jianqiao Lu
Darrel Scott
Thomas Scott
Chungwoo Suh
Rika Suzuki
Ann Tarca
Mary Tokar

Approval by the Board of Interest Rate Benchmark Reform—
Phase 2 issued in August 2020

Interest Rate Benchmark Reform—Phase 2, which amended IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16, was approved for issue by 12 of 13 members of the International Accounting
Standards Board (Board). Mr Gast abstained in view of his recent appointment to the
Board.
Hans Hoogervorst Chairman
Suzanne Lloyd Vice-Chair
Nick Anderson
Tadeu Cendon
Martin Edelmann
Françoise Flores
Zach Gast
Jianqiao Lu
Darrel Scott
Thomas Scott
Rika Suzuki
Ann Tarca
Mary Tokar