TaxTMI 
TaxTMI 
Financial Instruments: Disclosures
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....shall be applied by all entities to all types of financial instruments, except: (a) those interests in subsidiaries, associates or joint ventures that are accounted for in accordance with Ind AS 110, Consolidated Financial Statements, Ind AS 27, Separate Financial Statements or Ind AS 28, Investments in Associates and Joint Ventures. However, in some cases, Ind AS 110, Ind AS 27 or Ind AS 28 require or permit an entity to account for an interest in a subsidiary, associate or joint venture using Ind AS 109; in those cases, entities shall apply the requirements of this Ind AS and, for those measured at fair value, the requirements of Ind AS 113 Fair Value Measurement. Entities shall also apply this Ind AS to all derivatives linked to interests in subsidiaries, associates or joint ventures unless the derivative meets the definition of an equity instrument in Ind AS 32. (b) employers' rights and obligations arising from employee benefit plans, to which Ind AS 19, Employee Benefits, applies. (c) [Refer Appendix 1] ^32[(d) insurance contracts as defined in Ind AS 117, Insurance Contracts or investment contracts with discretionary participation features....
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....nd AS 109, are within the scope of this Ind AS. 5 This Ind AS applies to contracts to buy or sell a non-financial item that are within the scope of Ind AS 109. ^8[5A The credit risk disclosure requirements in paragraphs 35A to 35N apply to those rights that Ind AS 115, Revenue from Contracts with Customers specifies are accounted for in accordance with Ind AS 109 for the purposes of recognising impairment gains or losses. Any reference to financial assets or financial instruments in these paragraphs shall include those rights unless otherwise specified.] Classes of financial instruments and level of disclosure 6 When this Ind AS requires disclosures by class of financial instrument, an entity shall 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. An entity shall provide sufficient information to permit reconciliation to the line items presented in the balance sheet. Significance of financial instruments for financial position and performance 7 An entity shall disclose information that enables users of its financial statements to ev....
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....ir value of the financial asset (or group of financial assets) that is attributable to changes in the credit risk of the financial asset determined either: (i) as the amount of change in its fair value that is not attributable to changes in market conditions that give rise to market risk ; or (ii) using an alternative method the entity believes more faithfully represents the amount of change in its fair value that is attributable to changes in the credit risk of the asset. Changes in market conditions that give rise to market risk include changes in an observed (benchmark) interest rate, commodity price, foreign exchange rate or index of prices or rates. (d) the amount of the change in the fair value of any related credit derivatives or similar instruments that has occurred during the period and cumulatively since the financial asset was designated. 10 If the entity has designated a financial liability as at fair value through profit or loss in accordance with paragraph 4.2.2 of Ind AS 109 and is required to present the effects of changes in that liability's credit risk in other comprehensive income ( see paragraph 5.7.7 of Ind AS 109), it sha....
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....scription of the methodology or methodologies used to determine whether presenting the effects of changes in a liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss (see paragraphs 5.7.7 and 5.7.8 of Ind AS 109). If an entity is required to present the effects of changes in a liability's credit risk in profit or loss (see paragraph 5.7.8 of Ind AS 109), the disclosure must include a detailed description of the economic relationship described in paragraph B5.7.6 of Ind AS 109. Investments in equity instruments designated at fair value through other comprehensive income 11A If an entity has designated investments in equity instruments to be measured at fair value through other comprehensive income, as permitted by paragraph 5.7.5 of Ind AS 109, it shall disclose: (a) which investments in equity instruments have been designated to be measured at fair value through other comprehensive income. (b) the reasons for using this presentation alternative. (c) the fair value of each such investment at the end of the reporting period. (d) dividends recognised during the period, showing sep....
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....osures in paragraphs 13B-13E supplement the other disclosure requirements of this Ind AS and are required for all recognised financial instruments that are set off in accordance with paragraph 42 of Ind AS 32. These disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with paragraph 42 of Ind AS 32. 13B An entity shall disclose information to enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on the entity's financial position. This includes the effect or potential effect of rights of set-off associated with the entity's recognised financial assets and recognised financial liabilities that are within the scope of paragraph 13A. 13C To meet the objective in paragraph 13B, an entity shall disclose, at the end of the reporting period, the following quantitative information separately for recognised financial assets and recognised financial liabilities that are within the scope of paragraph 13A: (a) the gross amounts of those recognised financial assets and recognised fina....
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....ciated with its use of the collateral. Allowance account for credit losses 16 [Refer Appendix 1] 16A The carrying amount of financial assets measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A of Ind AS 109 is not reduced by a loss allowance and an entity shall not present the loss allowance separately in the balance sheet as a reduction of the carrying amount of the financial asset. However, an entity shall disclose the loss allowance in the notes to the financial statements. Compound financial instruments with multiple embedded derivatives 17 If an entity has issued an instrument that contains both a liability and an equity component (see paragraph 28 of Ind AS 32) and the instrument has multiple embedded derivatives whose values are interdependent (such as a callable convertible debt instrument), it shall disclose the existence of those features. Defaults and breaches 18 For loans payable recognised at the end of the reporting period, an entity shall disclose: (a) details of any defaults during the period of principal, interest, sinking fund, or redemption terms of those loans payable; (b) the ....
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....se (calculated using the effective interest method) for financial assets that are measured at amortised cost or that are measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A of Ind AS 109 (showing these amounts separately); or financial liabilities that are not measured at fair value through profit or loss. (c) fee income and expense (other than amounts included in determining the effective interest rate) arising from: (i) financial assets and financial liabilities that are not at fair value through profit or loss; and (ii) trust and other fiduciary activities that result in the holding or investing of assets on behalf of individuals, trusts, retirement benefit plans, and other institutions. (d)-(e) [Refer Appendix] 1 20A An entity shall disclose an analysis of the gain or loss recognised in the statement of profit and loss arising from the derecognition of financial assets measured at amortised cost, showing separately gains and losses arising from derecognition of those financial assets. This disclosure shall include the reasons for derecognising those financial assets. Other disclosures Account....
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....s for disclosure requirements of related information in this Ind AS and Ind AS 113, Fair Value Measurement. The risk management strategy 22 [Refer Appendix 1] 22A An entity shall explain its risk management strategy for each risk category of risk exposures that it decides to hedge and for which hedge accounting is applied. This explanation should enable users of financial statements to evaluate (for example): (a) how each risk arises. (b) how the entity manages each risk; this includes whether the entity hedges an item in its entirety for all risks or hedges a risk component (or components) of an item and why. (c) the extent of risk exposures that the entity manages. 22B To meet the requirements in paragraph 22A, the information should include (but is not limited to) a description of: (a) the hedging instruments that are used (and how they are used) to hedge risk exposures; (b) how the entity determines the economic relationship between the hedged item and the hedging instrument for the purpose of assessing hedge effectiveness; and (c) how the entity establishes the hedge ratio and what the sources of hedge ineffecti....
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.... disclose by risk category a description of the sources of hedge ineffectiveness that are expected to affect the hedging relationship during its term. 23E If other sources of hedge ineffectiveness emerge in a hedging relationship, an entity shall disclose those sources by risk category and explain the resulting hedge ineffectiveness. 23F For cash flow hedges, an entity shall disclose a description of any forecast transaction for which hedge accounting had been used in the previous period, but which is no longer expected to occur. The effects of hedge accounting on financial position and performance 24 [Refer Appendix 1] 24A An entity shall disclose, in a tabular format, the following amounts related to items designated as hedging instruments separately by risk category for each type of hedge (fair value hedge, cash flow hedge or hedge of a net investment in a foreign operation): (a) the carrying amount of the hedging instruments (financial assets separately from financial liabilities); (b) the line item in the balance sheet that includes the hedging instrument; (c) the change in fair value of the hedging instrument used as the basis for rec....
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....fair value in other comprehensive income in accordance with paragraph 5.7.5 of Ind AS 109); and (ii) the line item in the statement of profit and loss that includes the recognised hedge ineffectiveness. (b) for cash flow hedges and hedges of a net investment in a foreign operation: (i) hedging gains or losses of the reporting period that were recognised in other comprehensive income; (ii) hedge ineffectiveness recognised in profit or loss; (iii) the line item in the statement of profit and loss that includes the recognised hedge ineffectiveness; (iv) the amount reclassified from the cash flow hedge reserve or the foreign currency translation reserve into profit or loss as a reclassification adjustment (see Ind AS 1) (differentiating between amounts for which hedge accounting had previously been used, but for which the hedged future cash flows are no longer expected to occur, and amounts that have been transferred because the hedged item has affected profit or loss); (v) the line item in the statement of profit and loss that includes the reclassification adjustment (see Ind AS 1); and (vi) for hedges of net posi....
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....ccordance with paragraph 6.7.1 of Ind AS 109, a reconciliation of each of the nominal amount and the fair value at the beginning and at the end of the period; (b) the gain or loss recognised in profit or loss on designation of a financial instrument, or a proportion of it, as measured at fair value through profit or loss in accordance with paragraph 6.7.1 of Ind AS 109; and (c) on discontinuation of measuring a financial instrument, or a proportion of it, at fair value through profit or loss, that financial instrument's fair value that has become the new carrying amount in accordance with ^17[paragraph 6.7.4 of Ind AS 109] and the related nominal or principal amount (except for providing comparative information in accordance with Ind AS 1, an entity does not need to continue this disclosure in subsequent periods). ^14[Uncertainty arising from interest rate benchmark reform 24H For hedging relationships to which an entity applies the exceptions set out in paragraphs 6.8.4-6.8.12 of Ind AS 109, an entity shall disclose- (a) the significant interest rate benchmarks to which the entity's hedging relationships are exposed; (b) the extent of the ....
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....with its carrying amount. 26 In disclosing fair values, an entity shall group financial assets and financial liabilities into classes, but shall offset them only to the extent that their carrying amounts are offset in the balance sheet. 27- 27B [Refer Appendix 1] 28 In some cases, an entity does not recognise a gain or loss on initial recognition of a financial asset or financial liability because the fair value is neither evidenced by a quoted price in an active market for an identical asset or liability (ie a Level 1 input) nor based on a valuation technique that uses only data from observable markets (see paragraph B5.1.2A of Ind AS 109). In such cases, the entity shall disclose by class of financial asset or financial liability: (a) its accounting policy for recognising in profit or loss the difference between the fair value at initial recognition and the transaction price to reflect a change in factors (including time) that market participants would take into account when pricing the asset or liability (see paragraph B5.1.2A(b) of Ind AS 109). (b) the aggregate difference yet to be recognised in profit or loss at the beginning and end of the period a....
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....b) the disclosures required by paragraphs 36-42, to the extent not provided in accordance with (a). (c) concentrations of risk if not apparent from the disclosures made in accordance with (a) and (b). 35 If the quantitative data disclosed as at the end of the reporting period are unrepresentative of an entity's exposure to risk during the period, an entity shall provide further information that is representative. Credit risk Scope and objectives 35A An entity shall apply the disclosure requirements in paragraphs 35F-35N to financial instruments to which the impairment requirements in Ind AS 109 are applied. However: (a) for trade receivables, contract assets and lease receivables, ^19[paragraph 35J(a)] applies to those trade receivables, contract assets or lease receivables on which lifetime expected credit losses are recognised in accordance with paragraph 5.5.15 of Ind AS 109, if those financial assets are modified while more than 30 days past due; and (b) paragraph 35K(b) does not apply to lease receivables. 35B The credit risk disclosures made in accordance with paragraphs 35F-35N shall enable users of financial statements t....
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....s increased significantly since initial recognition, including, if and how: (i) financial instruments are considered to have low credit risk in accordance with paragraph 5.5.10 of Ind AS 109, including the classes of financial instruments to which it applies; and (ii) the presumption in paragraph 5.5.11 of Ind AS 109, that there have been significant increases in credit risk since initial recognition when financial assets are more than 30 days past due, has been rebutted; (b) an entity's definitions of default, including the reasons for selecting those definitions; (c) how the instruments were grouped if expected credit losses were measured on a collective basis; (d) how an entity determined that financial assets are credit-impaired financial assets; (e) an entity's write-off policy, including the indicators that there is no reasonable expectation of recovery and information about the policy for financial assets that are written-off but are still subject to enforcement activity; and (f) how the requirements in paragraph 5.5.12 of Ind AS 109 for the modification of contractual cash flows of financial assets have been app....
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....edit-impaired); and (iii) trade receivables, contract assets or lease receivables for which the loss allowances are measured in accordance with paragraph 5.5.15 of Ind AS 109. (c) financial assets that are purchased or originated credit-impaired. In addition to the reconciliation, an entity shall disclose the total amount of undiscounted expected credit losses at initial recognition on financial assets initially recognised during the reporting period. 35I To enable users of financial statements to understand the changes in the loss allowance disclosed in accordance with paragraph 35H, an entity shall provide an explanation of how significant changes in the gross carrying amount of financial instruments during the period contributed to changes in the loss allowance. The information shall be provided separately for financial instruments that represent the loss allowance as listed in paragraph 35H(a)-(c) and shall include relevant qualitative and quantitative information. Examples of changes in the gross carrying amount of financial instruments that contributed to the changes in the loss allowance may include: (a) changes because of financial instruments ....
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....od; and (iii) information about financial instruments for which an entity has not recognised a loss allowance because of the collateral. (c) quantitative information about the collateral held as security and other credit enhancements (for example, quantification of the extent to which collateral and other credit enhancements mitigate credit risk) for financial assets that are credit-impaired at the reporting date. 35L An entity shall disclose the contractual amount outstanding on financial assets that were written off during the reporting period and are still subject to enforcement activity. Credit risk exposure 35M To enable users of financial statements to assess an entity's credit risk exposure and understand its significant credit risk concentrations, an entity shall disclose, by credit risk rating grades, the gross carrying amount of financial assets and the exposure to credit risk on loan commitments and financial guarantee contracts. This information shall be provided separately for financial instruments: (a) for which the loss allowance is measured at an amount equal to 12-month expected credit losses; (b) for which the loss allo....
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....h assets held at the reporting date: (a) the nature and carrying amount of the assets; and (b) when the assets are not readily convertible into cash, its policies for disposing of such assets or for using them in its operations. Liquidity risk 39 An entity shall disclose: (a) a maturity analysis for non-derivative financial liabilities (including issued financial guarantee contracts) that shows the remaining contractual maturities. (b) a maturity analysis for derivative financial liabilities. The maturity analysis shall include the remaining contractual maturities for those derivative financial liabilities for which contractual maturities are essential for an understanding of the timing of the cash flows (see paragraph B11B). (c) a description of how it manages the liquidity risk inherent in (a) and (b). Market risk Sensitivity analysis 40 Unless an entity complies with paragraph 41, it shall disclose: (a) a sensitivity analysis for each type of market risk to which the entity is exposed at the end of the reporting period, showing how profit or loss and equity would have been affected by changes in the relevant ri....
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....ment. 42B An entity shall disclose information that enables users of its financial statements: (a) to understand the relationship between transferred financial assets that are not derecognised in their entirety and the associated liabilities; and (b) to evaluate the nature of, and risks associated with, the entity's continuing involvement in derecognised financial assets. 42C For the purposes of applying the disclosure requirements in paragraphs 42E-42H, an entity has continuing involvement in a transferred financial asset if, as part of the transfer, the entity retains any of the contractual rights or obligations inherent in the transferred financial asset or obtains any new contractual rights or obligations relating to the transferred financial asset. For the purposes of applying the disclosure requirements in paragraphs 42E-42H, the following do not constitute continuing involvement: (a) normal representations and warranties relating to fraudulent transfer and concepts of reasonableness, good faith and fair dealings that could invalidate a transfer as a result of legal action; (b) forward, option and other contracts to reacquire the tran....
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.... shall disclose, as a minimum, for each type of continuing involvement at each reporting date: (a) the carrying amount of the assets and liabilities that are recognised in the entity's balance sheet and represent the entity's continuing involvement in the derecognised financial assets, and the line items in which the carrying amount of those assets and liabilities are recognised. (b) the fair value of the assets and liabilities that represent the entity's continuing involvement in the derecognised financial assets. (c) the amount that best represents the entity's maximum exposure to loss from its continuing involvement in the derecognised financial assets, and information showing how the maximum exposure to loss is determined. (d) the undiscounted cash outflows that would or may be required to repurchase derecognised financial assets (eg the strike price in an option agreement) or other amounts payable to the transferee in respect of the transferred assets. If the cash outflow is variable then the amount disclosed should be based on the conditions that exist at each reporting date. (e) a maturity analysis of the undiscounted cash outflow....
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.... and 29 and deleted paragraph 30. An entity shall apply those amendments when it applies Ind AS 117.] ^21[44EE] Interest Rate Benchmark Reform (amendments to Ind AS 109 and Ind AS 107) added paragraphs 24H and 44DF. An entity shall apply these amendments when it applies the amendments to Ind AS 109. ^21[44FF] In the reporting period in which an entity first applies Interest Rate Benchmark Reform, an entity is not required to present the quantitative information required by paragraph 28(f) of Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors.] ^22[44GG Interest Rate Benchmark Reform-Phase 2, which amended Ind AS 109, Ind AS 107, Ind AS 104 and Ind AS 116, added paragraphs 24I-24J and 44HH. An entity shall apply these amendments when it applies the amendments to Ind AS 109, Ind AS 104 or Ind AS 116. 44HH In the reporting period in which an entity first applies Interest Rate Benchmark Reform- Phase 2, an entity is not required to disclose the information that would otherwise be required by paragraph 28(f) of Ind AS 8.] ^29[44II Disclosure of Accounting Policies, which amends Ind AS 1 amended paragraphs 21 and B5. An entity shall apply t....
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....¢ effective interest method • ^23[effective interest rate] • equity instrument • expected credit losses • fair value • financial asset • financial guarantee contract • financial instrument • financial liability • financial liability at fair value through profit or loss • forecast transaction • ^24[gross carrying amount of a financial asset] • hedging instrument • held for trading • impairment gains or losses • loss allowance • ^25[past due] • purchased or originated credit-impaired financial assets • reclassification date • regular way purchase or sale Appendix B Application guidance This appendix is an integral part of the Ind AS. Classes of financial instruments and level of disclosure (paragraph 6) B1 Paragraph 6 requires an entity 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. ....
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....through profit or loss; and (ii) how the entity has satisfied the criteria in paragraph 4.1.5 of Ind AS 109 for such designation. (b) [Refer Appendix 1] (c) whether regular way purchases and sales of financial assets are accounted for at trade date or at settlement date (see paragraph 3.1.2 of Ind AS 109). (d) [Refer Appendix 1] (e) how net gains or net losses on each category of financial instrument are determined (see paragraph 20(a)), for example, whether the net gains or net losses on items at fair value through profit or loss include interest or dividend income. (f)-(g) [Refer Appendix 1] ^31[Paragraph 122 of Ind AS 1 also requires entities to disclose, along with material accounting policy information or other notes, the judgements, apart from those involving estimations, that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.] Nature and extent of risks arising from financial instruments (paragraphs 31-42) B6 The disclosures required by paragraphs 31-42 shall be either given in the financi....
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....ng default; (b) whether different definitions have been applied to different types of financial instruments; and (c) assumptions about the cure rate (ie the number of financial assets that return to a performing status) after a default occurred on the financial asset. B8B To assist users of financial statements in evaluating an entity's restructuring and modification policies, ^26[paragraph 35F(f)(ii) requires] the disclosure of information about how an entity monitors the extent to which the loss allowance on financial assets previously disclosed in accordance with paragraph 35F(f)(i) are subsequently measured at an amount equal to lifetime expected credit losses in accordance with paragraph 5.5.3 of Ind AS 109. Quantitative information that will assist users in understanding the subsequent increase in credit risk of modified financial assets may include information about modified financial assets meeting the criteria in paragraph 35F(f)(i) for which the loss allowance has reverted to being measured at an amount equal to lifetime expected credit losses (ie a deterioration rate). B8C Paragraph 35G(a) requires the disclosure of information about the basis of ....
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....tify the exact value of the collateral that was included in the calculation of expected credit losses (ie the loss given default). B8G A narrative description of collateral and its effect on amounts of expected credit losses might include information about: (a) the main types of collateral held as security and other credit enhancements (examples of the latter being guarantees, credit derivatives and netting agreements that do not qualify for offset in accordance with Ind AS 32); (b) the volume of collateral held and other credit enhancements and its significance in terms of the loss allowance; (c) the policies and processes for valuing and managing collateral and other credit enhancements; (d) the main types of counterparties to collateral and other credit enhancements and their creditworthiness; and (e) information about risk concentrations within the collateral and other credit enhancements. Credit risk exposure (paragraphs 35M-35N) B8H Paragraph 35M requires the disclosure of information about an entity's credit risk exposure and significant concentrations of credit risk at the reporting date. A concentration of credit risk e....
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....the associated maximum exposure to credit risk include, but are not limited to: (a) granting loans to customers and placing deposits with other entities. In these cases, the maximum exposure to credit risk is the carrying amount of the related financial assets. (b) entering into derivative contracts, eg foreign exchange contracts, interest rate swaps and credit derivatives. When the resulting asset is measured at fair value, the maximum exposure to credit risk at the end of the reporting period will equal the carrying amount. (c) granting financial guarantees. In this case, the maximum exposure to credit risk is the maximum amount the entity could have to pay if the guarantee is called on, which may be significantly greater than the amount recognised as a liability. (d) making a loan commitment that is irrevocable over the life of the facility or is revocable only in response to a material adverse change. If the issuer cannot settle the loan commitment net in cash or another financial instrument, the maximum credit exposure is the full amount of the commitment. This is because it is uncertain whether the amount of any undrawn portion may be drawn....
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....hat show the remaining contractual maturities for some financial liabilities. In this disclosure: (a) when a counterparty has a choice of when an amount is paid, the liability is allocated to the earliest period in which the entity can be required to pay. For example, financial liabilities that an entity can be required to repay on demand (eg demand deposits) are included in the earliest time band. (b) when an entity is committed to make amounts available in instalments, each instalment is allocated to the earliest period in which the entity can be required to pay. For example, an undrawn loan commitment is included in the time band containing the earliest date it can be drawn down. (c) for issued financial guarantee contracts the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called. B11D The contractual amounts disclosed in the maturity analyses as required by paragraph 39(a) and (b) are the contractual undiscounted cash flows, for example: ^12[(a) gross lease liabilities (before deducting finance charges);] (b) prices specified in forward agreements to purchase financial assets f....
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....its own shares; (i) has instruments that are subject to master netting agreements; or (j) has accessed, or has access to, facilities under supplier finance arrangements (as described in paragraph 44G of Ind AS 7) that provide the entity with extended payment terms or the entity's suppliers with early payment terms.] B12-B16 [Refer Appendix 1] Market risk - sensitivity analysis (paragraphs 40 and 41) B17 Paragraph 40(a) requires a sensitivity analysis for each type of market risk to which the entity is exposed. In accordance with paragraph B3, an entity decides how it aggregates information to display the overall picture without combining information with different characteristics about exposures to risks from significantly different economic environments. For example: (a) an entity that trades financial instruments might disclose this information separately for financial instruments held for trading and those not held for trading. (b) an entity would not aggregate its exposure to market risks from areas of hyperinflation with its exposure to the same market risks from areas of very low inflation. If an entity has exposure to only one ....
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....ent or 6 per cent. The entity would not be required to revise its assessment that interest rates might reasonably fluctuate by +/-50 basis points, unless there is evidence that interest rates have become significantly more volatile. (b) the time frame over which it is making the assessment. The sensitivity analysis shall show the effects of changes that are considered to be reasonably possible over the period until the entity will next present these disclosures, which is usually its next annual reporting period. B20 Paragraph 41 permits an entity to use a sensitivity analysis that reflects interdependencies between risk variables, such as a value-at-risk methodology, if it uses this analysis to manage its exposure to financial risks. This applies even if such a methodology measures only the potential for loss and does not measure the potential for gain. Such an entity might comply with paragraph 41(a) by disclosing the type of value-at-risk model used (eg whether the model relies on Monte Carlo simulations), an explanation about how the model works and the main assumptions (eg the holding period and confidence level). Entities might also disclose the historical observat....
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....ed separately from the sensitivity of other comprehensive income (that arises, for example, from investments in equity instruments whose changes in fair value are presented in other comprehensive income ). B28 Financial instruments that an entity classifies as equity instruments are not remeasured. Neither profit or loss nor equity will be affected by the equity price risk of those instruments. Accordingly, no sensitivity analysis is required. Derecognition (paragraphs 42C-42H) Continuing involvement (paragraph 42C) B29 The assessment of continuing involvement in a transferred financial asset for the purposes of the disclosure requirements in paragraphs 42E-42H is made at the level of the reporting entity. For example, if a subsidiary transfers to an unrelated third party a financial asset in which the parent of the subsidiary has continuing involvement, the subsidiary does not include the parent's involvement in the assessment of whether it has continuing involvement in the transferred asset in its separate or individual financial statements (ie when the subsidiary is the reporting entity). However, a parent would include its continuing involvement (or that of another ....
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....e transfer. Transferred financial assets that are not derecognised in their entirety (paragraph 42D) B32 Paragraph 42D requires disclosures when part or all of the transferred financial assets do not qualify for derecognition. Those disclosures are required at each reporting date at which the entity continues to recognise the transferred financial assets, regardless of when the transfers occurred. Types of continuing involvement (paragraphs 42E-42H) B33 Paragraphs 42E-42H require qualitative and quantitative disclosures for each type of continuing involvement in derecognised financial assets. An entity shall aggregate its continuing involvement into types that are representative of the entity's exposure to risks. For example, an entity may aggregate its continuing involvement by type of financial instrument (eg guarantees or call options) or by type of transfer (eg factoring of receivables, securitisations and securities lending). Maturity analysis for undiscounted cash outflows to repurchase transferred assets (paragraph 42E(e)) B34 Paragraph 42E(e) requires an entity to disclose a maturity analysis of the undiscounted cash outflows to repurchase derecognised fin....
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....lose if a gain or loss on derecognition arose because the fair values of the components of the previously recognised asset (ie the interest in the asset derecognised and the interest retained by the entity) were different from the fair value of the previously recognised asset as a whole. In that situation, the entity shall also disclose whether the fair value measurements included significant inputs that were not based on observable market data, as described in paragraph 27A. Supplementary information (paragraph 42H) B39 The disclosures required in paragraphs 42D-42G may not be sufficient to meet the disclosure objectives in paragraph 42B. If this is the case, the entity shall disclose whatever additional information is necessary to meet the disclosure objectives. The entity shall decide, in the light of its circumstances, how much additional information it needs to provide to satisfy the information needs of users and how much emphasis it places on different aspects of the additional information. It is necessary to strike a balance between burdening financial statements with excessive detail that may not assist users of financial statements and obscuring information as a res....
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.... netting arrangement or similar agreement irrespective of whether they meet the offsetting criteria. However, the disclosures required by paragraph 13C(a) do not relate to any amounts recognised as a result of collateral agreements that do not meet the offsetting criteria in paragraph 42 of Ind AS 32. Instead, such amounts are required to be disclosed in accordance with paragraph 13C(d). Disclosure of the amounts that are set-off in accordance with the criteria in paragraph 42 ofInd AS 32 (paragraph 13C(b)) B44 Paragraph 13C(b) requires that entities disclose the amounts set-off in accordance with paragraph 42 of Ind AS 32 when determining the net amounts presented in the balance sheet. The amounts of both the recognised financial assets and the recognised financial liabilities that are subject to set-off under the same arrangement will be disclosed in both the financial asset and financial liability disclosures. However, the amounts disclosed (in, for example, a table) are limited to the amounts that are subject to set-off. For example, an entity may have a recognised derivative asset and a recognised derivative liability that meet the offsetting criteria in paragraph 42 of ....
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....al collateral, including cash collateral, both received and pledged. An entity shall disclose the fair value of those financial instruments that have been pledged or received as collateral. The amounts disclosed in accordance with paragraph 13C(d)(ii) should relate to the actual collateral received or pledged and not to any resulting payables or receivables recognised to return or receive back such collateral. Limits on the amounts disclosed in paragraph 13C(d) (paragraph 13D) B49 When disclosing amounts in accordance with paragraph 13C(d), an entity must take into account the effects of over-collateralisation by financial instrument. To do so, the entity must first deduct the amounts disclosed in accordance with paragraph 13C(d)(i) from the amount disclosed in accordance with paragraph 13C(c). The entity shall then limit the amounts disclosed in accordance with paragraph 13C(d)(ii) to the remaining amount in paragraph 13C(c) for the related financial instrument. However, if rights to collateral can be enforced across financial instruments, such rights can be included in the disclosure provided in accordance with paragraph 13D. Description of the rights of set-off subject ....
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....n the entity's financial position. Appendix C References to matters contained in other Indian Accounting Standards This Appendix is an integral part of the Ind AS. This appendix lists the appendices which are part of other Indian Accounting Standards and makes reference to Ind AS 107, Financial Instruments: Disclosures. 1. Appendix A, Distributions of Non-cash Assets to Owners, contained in Ind AS 10, Events After the Reporting Period ^9[2. Appendix D, Service Concession Arrangements, contained in Ind AS 115, Revenue from Contracts with Customers.] Appendix 1 Note: This Appendix is not a part of the Indian Accounting Standard. The purpose of this Appendix is only to bring out the major differences, if any, between Indian Accounting Standard (Ind AS) 107 and the corresponding International Accounting Standard (IFRS) 7, Financial Instruments: Disclosures, issued by the International Accounting Standards Board. Comparison with IFRS 7, Financial Instruments: Disclosures 1 The transitional provisions given in IAS 107 have not been given in Ind AS 107, since all transitional provisions related to Ind ASs, wherever considered appropriate have been includ....
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....2009-CL-V(Part) - Dated 30-3-2016 before it was read as, "5A The credit risk disclosure requirements in paragraph 35A-35N apply to those rights that Ind AS 115 Revenue from Contracts with Customers specifies are accounted for in accordance with Ind AS 109 for the purposes of recognising impairment gains or losses. Any reference to financial assets or financial instruments in these paragraphs shall include those rights unless otherwise specified." 2. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, "21 In accordance with paragraph 117 of Ind AS 1 Presentation of Financial Statements, an entity discloses, in the summary of significant accounting policies, the measurement basis (or bases) used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements." 3. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, "B5 Paragraph 21 requires disclosure of the measurement basis (or bases) used in preparing the financial statements and the other accounting policies used that are relevant to an understan....
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....t VII)] dated 30-03-2019 w.e.f. 01-04-2019 before it was read as "(c) for a contract containing a discretionary participation feature (as described in Ind AS 104) if the fair value of that feature cannot be measured reliably." 11. Inserted vide NOTIFICATION No. [F. No. 01/01/2009-CL-V-(Part VII)] dated 30-03-2019 w.e.f. 01-04-2019 12. Substituted vide NOTIFICATION No. [F. No. 01/01/2009-CL-V-(Part VII)] dated 30-03-2019 w.e.f. 01-04-2019 before it was read as "(a) gross finance lease obligations (before deducting finance charges);" 13. Inserted vide NOTIFICATION No. [F. No. 01/01/2009-CL-V-(Part VII)] dated 30-03-2019 w.e.f. 01-04-2019 14. Inserted vide NOTIFICATION NO. G.S.R. 463(E) dated 24-07-2020 15. Inserted vide NOTIFICATION NO. G.S.R. 463(E) dated 24-07-2020 16. Substituted vide NOTIFICATION NO. G.S.R. 463(E) dated 24-07-2020 before it was read as, ^"13[5. Paragraphs 42I-42S of IFRS 7 have not been included in Ind AS 107 as these paragraphs relate to Initial application of IFRS 9 which are not relevant in Indian context. Paragraphs 43-44BB related to effective date and transition given in IFRS 7 have not been giv....
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....anding of the financial statements. For financial instruments, such disclosure may include:]" 31. Substituted vide Notification G.S.R. 242(E), dated 31.03.2023 w.e.f. 01.04.2023, before it was read as, "^4[Paragraph 122 of Ind AS 1 also requires entities to disclose, along with its significant accounting policies or other notes, the judgements, apart from those involving estimations, that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.]" 32. Substituted vide Notification No. G.S.R. 492 (E) dated 12-08-2024 before it was read as, "(d) insurance contracts as defined in Ind AS 104, Insurance Contracts. However, this Ind AS applies to derivatives that are embedded in insurance contracts if Ind AS 109 requires the entity to account for them separately. Moreover, an issuer shall apply this Ind AS to financial guarantee contracts if the issuer applies Ind AS 109 in recognising and measuring the contracts, but shall apply Ind AS 104 if the issuer elects, in accordance with paragraph 4(d) of Ind AS 104, to app....