IFRS 7 – Financial Instruments: Disclosures


IFRS 7 Financial Instruments: Disclosures require a business to disclose information on the financial instruments’ relevance to the entity and the type and extent of the risks associated with those financial instruments, both qualitatively and quantitatively.

Certain disclosures are necessary in connection with the transfer of financial assets and various other things.

Disclosure requirements of IFRS 7

Certain disclosures are required to be reported by instrument type per IAS 39 measurement categories. Additional disclosures are necessarily based on the kind of financial instrument. For those disclosures, a company must classify its financial instruments according to the type of information disclosed.

The two primary kinds of disclosures mandated by IFRS 7 are as follows:

Transfers of financial assets

An entity shall publish information that enables users of its financial statements to make the following determinations:

Transferred financial assets that are not derecognised in their entirety

Required disclosures include a description of the transferred assets’ nature, the risk and reward connected with them, as well as a qualitative and quantitative explanation of the link between the transferred financial assets and their related obligations.

Transferred financial assets that are derecognised in their entirety

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