The objective of IFRS 7 is focused on financial instrument disclosures, and is based on the notion that entities should provide disclosures in their financial statements that enable users to evaluate the significance of financial instruments for the entity’s financial position and performance. Further, IFRS 7 places emphasis on disclosures about risks associated with both recognized and unrecognized financial instruments and how these risks are managed.
IFRS 7 requires disclosure of information that enables users of an entity’s financial statements to evaluate the significance of financial instruments for its financial position and performance (¶7). IFRS 7 also requires that the disclosure be more than just the category of financial instrument (¶8); it must also reveal data about classes of financial instruments within the categories. IFRS 7 further states that an entity has to group 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.
IFRS 7, Financial Instruments: Disclosure — 2012
For a more comprehensive course for IFRS 7/IAS 32, see, IFRS 7/IAS 32 – Financial Instruments — Presentation & Disclosures — 2012.
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