The International Accounting Standards Board
(IASB) has issued amendments to IFRS 7.
IFRS 7 Financial Instruments is the standard
applied to disclosures as part of its comprehensive review of
off-balance sheet activities.
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The amendments allow improved understanding of
financial asset transfer transactions and the risks that may remain
with the entity that transferred the assets.
Additional disclosure is now required if a
disproportionate amount of transfer transactions occur at the end
of a reporting period.
The IASB decided to retain existing
de-recognition requirements based on feedback from IAS 39 Financial
Instruments – Recognition and Measurement and the associated
disclosure requirements in IFRS 7.
Improved disclosure requirements for IFRS 7
are contained in Disclosures – Transfers of financial assets.
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By GlobalData“These are important disclosure requirements
that will help investors to better understand off-balance sheet
risks, and to alert them to the possibility of so-called ‘window
dressing’ transactions occurring at the end of a reporting period,”
IASB chairman David Tweedie said.
