Derivative Financial Liabilities

Accounting Policies to First IFRS FS

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Accounting Policies to First IFRS FS – An entity must use the same accounting policies in its opening IFRS statement of financial position and throughout all periods presented in its first IFRS financial statements. Those accounting policies must comply with each IFRSs effective at the end of its first IFRS reporting period, unless there is a mandatory exception to retrospective application or an optional exemption from the requirements of IFRSs. [IFRS 1, paras 7 – 9] Note that: An entity may apply a new IFRS that is not yet mandatory if that IFRSs permits early application. The transitional provisions in IFRSs do not apply to a first-time adopter’s transition to IFRSs. Mandatory Exceptions to Retrospective Application and Optional Exemptions from … Read more

Disclosure Financial risk management

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Disclosure Financial risk management

Disclosure financial risk management provides the guidance on the need for disclosure of the management policies, procedures and measurement practices in place at the operations within the reporting entity’s group of companies and an actual example of disclosures for financial risk management.

Disclosure Financial risk management guidance

Classes of financial instruments

Where IFRS 7 requires disclosures by class of financial instrument, the entity shall group its 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 are determined by the entity and are therefore distinct from the categories of financial instruments specified in IFRS 9. Disclosure Financial risk management

As a minimum, the entity should distinguish between financial instruments measured at amortised cost and those measured at fair value, and treat as separate class any financial instruments outside the scope of IFRS 9. The entity shall provide sufficient information to permit reconciliation to the line items presented in the balance sheet. Guidance on classes of financial instruments and the level of required disclosures is provided in Appendix B to IFRS 7. [IFRS 7.6, IFRS 7.B1-B3]

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IFRS 7 Complete Maturity analysis disclosure

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IFRS 7 Complete Maturity analysis disclosure – IFRS 7 requires certain disclosures to be presented by category of an instrument based on the IFRS 9 recognition and measurement categories of financial instruments. Certain other disclosures are required by class of financial instrument. For those disclosures an entity must group its financial instruments into classes of similar instruments as appropriate to the nature of the information presented. [IFRS 7 6] The two main categories of disclosures required by IFRS 7 are: information about the significance of financial instruments [IFRS 7 7 – 30] information about the nature and extent of risks arising from financial instruments [IFRS 7 31 – 42] So IFRS 7 bets on two disclosure options for these two … Read more

Liquidity risk

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Liquidity risk: The risk that an entity encounters difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash.