IFRS 7 Financial Instruments: Disclosures
IFRS 7 sets out the disclosures companies must provide about financial instruments: their significance for financial position and performance, and the nature and extent of the risks arising from them.
Related Standards
Explanation
IFRS 7 covers qualitative and quantitative disclosures on:
• credit risk – including the expected credit loss allowance and its development,
• liquidity risk – for example, maturity analyses of financial liabilities,
• market risk – including interest rate and currency risk, often with sensitivity analyses.
Its credit risk requirements also apply to items for which expected credit losses are recognized under IFRS 9, such as trade receivables, contract assets, and lease receivables. IFRS 7 contains no measurement rules; recognition and measurement follow IFRS 9.
Why It Matters
Companies with large receivable, contract asset, or lease receivable portfolios – such as equipment lessors – need structured data on balances, aging, credit quality, and interest rates to prepare IFRS 7 disclosures. Revenue and lease accounting systems should be designed to provide this data reliably.
Related Terms
IFRS 9 · Contract Asset · Net Investment in the Lease · Effective Interest Method
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