Disclosures – Hedges – Financial position

Disclosures – The Disclosures – Hedges – Financial position – Performance on the financial position and performance

IFRS 7 sets out a specific requirement to disclose the effect hedge accounting has on the entity’s financial position and the performance. All disclosures are required in a tabular format and by type of risk.

Instead of reproducing the specific requirements of IFRS 7 we provide examples below of how those disclosures might look.

Disclosures – Hedges – Financial position – Performance

IFRS 7 further requires a reconciliation of the components in equity that arise in connection with hedge accounting (such as the hedging reserve) and an analysis of OCI. That information needs to be disaggregated by risk category, which can be done in the notes.

Disclosure requirements of IFRS 7

IFRS requires certain disclosures to be presented by category of instrument based on the IAS 39 measurement categories (see below IFRS 7 8). 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.
  • information about the nature and extent of risks arising from financial instruments

Information about the significance of financial instruments – Statement of financial position

Disclose the significance of financial instruments for an entity’s financial position and performance. [IFRS 7 7]

This includes disclosures for each of the following categories: [IFRS 7 8]

  • Financial assets measured at fair value through profit and loss, showing separately those held for trading and those designated at initial recognition
  • held-to-maturity investments
  • loans and receivables
  • available-for-sale assets
  • financial liabilities at fair value through profit and loss, showing separately those held for trading and those designated at initial recognition
  • financial liabilities measured at amortised cost

Disclosures – The Disclosures – Hedges – Financial position – Performance on the financial position and performance

Disclosures – Hedges – Financial position

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