IFRS Preparers Be Warned - IFRS 7 Introduces Further Demanding Requirements

IFRS 7, which replaces IAS 30 and IAS 32, has a number of new disclosure requirements that companies need to take into account.

IFRS 7, ‘Financial Instruments: Disclosures’ combines the disclosure requirements arising from IAS 30 and IAS 32 in a new standard. As a result, IAS 30 and paragraphs 51 to 95 of IAS 32 have been superseded. The remaining paragraphs of IAS 32 are still effective as ‘Financial Instruments: Presentation’ (IFRS 25).

IFRS 7, issued on 18 August 2005 and adopted for use in the European Union on 27 January 2006, is now in force, effective for periods beginning on or after 1 January 2007. The standard has been available for early application in the UK for some time, and though take-up was encouraged (but not required), only a few companies chose to adopt it early. For many IFRS preparers, the new standard will result in more onerous disclosure requirements.