Financial Instruments on Display - Illustrative Disclosures and Guidance on IFRS 7

Published by the IFRS team at Grant Thornton International Ltd.

Experience has shown that IFRS 7 presents challenges, and two years of practical experience enables us to share our insights into the most problematic areas. Moreover, the global financial crisis has put the spotlight on the adequacy of risk and other disclosures concerning financial instruments. The crisis has also led the IASB to add some significant new requirements to IFRS 7 in recent months. The latest edition of the publication has been updated to reflect these requirements which come into effect from 1 January 2009.


Liability or equity? A practical guide to the classification of financial instruments under IAS 32

Published by the IFRS team at Grant Thornton International Ltd.

When an entity issues a financial instrument, it must determine its classification either as a liability (debt) or as equity. This determination has an immediate and significant effect on the entity's reported results and financial position. Understanding the classification process and its effects is therefore a critical issue for management.

IAS 32 Financial Instruments: Presentation (IAS 32) addresses this classification process. Although its approach is founded upon principles, its outcomes sometimes seem surprising. Instead of looking at the legal form, it focuses on the instruments' contractual obligations, which can itself be challenging. Partially in recognition of these problems, the International Accounting Standards Board issued amendments to IAS 32 in 2008 which depart from the core principles of the Standard.

This publication offers extensive insights into the more problematic aspects of debt and equity classification under IAS 32, including those that are expected to arise from the amendments published in 2008.


Financial Instruments - A Chief Financial Officer's guide to avoiding the traps

Published by the IFRS team at Grant Thornton International Ltd.

The guide is intended for Chief Financial Officers (CFOs) of businesses that prepare financial statements under IFRS. It summarises the impact of IAS 39 Financial Instruments: Recognition and Measurement together with relevant parts of IAS 32 Financial Instruments: Presentation. It also summarises the main challenges that businesses typically encounter in order to help CFOs to prioritise and identify key issues. The guide will help a CFO to understand potential problem areas in order to know when to consult further.

Download PDF

The instruments covered by 'IFRS 7 Financial Instruments: Disclosure'

The instruments covered by 'IFRS 7 Financial Instruments: Disclosure' are extensive, ranging from straightforward instruments such as bank accounts, trade receivables and payables, to more complex financial instruments such as derivatives. Accordingly, IFRS 7 is likely to be relevant for all entities applying IFRS in their financial statements, including non-financial services entities. IFRS 7 is mandatory for reporting periods starting on or after 1 January 2007. It requires full comparative information (subject to certain exemptions if applied for annual periods beginning before 1 January 2006). Advance planning is recommended to ensure full compliance with the extensive disclosure requirements of IFRS 7. Some required disclosures may be considered commercially sensitive. Some of the required information may not be readily available from existing management reporting systems. A number of implementation issues should therefore be addressed well ahead of year-end procedures.



Contact us

Simply complete your details and we will contact you.

Download the New World in Figures app!

Download The Economist’s ‘World in Figures’ 2013 app for iPhone and iPad and discover hundreds of economic, socio-demographic, cultural and environmental facts from over 190 countries. This app is free with compliments of Grant Thornton.