Financial instrument reporting requires classification, expected credit loss allowances, derecognition assessment, and documented hedge accounting based on risk management.

Ind AS 109 requires recognition when an entity becomes party to a financial instrument and governs classification, measurement, derecognition, impairment and hedge accounting. Financial assets are measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss according to the business model and contractual cash-flow characteristics. Derecognition of transferred assets depends on transfer of risks and rewards and retained control. The expected credit loss model requires loss allowances using 12-month or lifetime expected credit losses according to changes in credit risk. Hedge accounting applies only to documented qualifying hedging relationships.

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