The Impact of IFRS on Industry. Lavi Mohan R.

description of each hedge, hedging instrument, and fair values of those instruments, and nature of risks being hedged,

      ● for cash flow hedges, the periods in which the cash flows are expected to occur, when they are expected to enter into the determination of profit or loss, and a description of any forecast transaction for which hedge accounting had previously been used but which is no longer expected to occur.

      ● If a gain or loss on a hedging instrument in a cash flow hedge has been recognised in other comprehensive income, an entity should disclose the following:

      ● the amount that was so recognised in other comprehensive income during the period,

      ● the amount that was removed from equity and included in profit or loss for the period,

      ● the amount that was removed from equity during the period and included in the initial measurement of the acquisition cost or other carrying amount of a non-financial asset or non-financial liability in a hedged highly probable forecast transaction.

      ● For fair value hedges, information about the fair value changes of the hedging instrument and the hedged item.

      ● Hedge ineffectiveness recognised in profit and loss (separately for cash flow hedges and hedges of a net investment in a foreign operation).

      ● Information about the fair values of each class of financial asset and financial liability, along with:

      ● comparable carrying amounts,

      ● description of how fair value was determined,

      ● the level of inputs used in determining fair value,

      ● reconciliations of movements between levels of fair value measurement hierarchy additional disclosures for financial instruments whose fair value is determined using level 3 inputs including impacts on profit and loss, other comprehensive income and sensitivity analysis,

      ● information if fair value cannot be reliably measured.

      ● The fair value hierarchy introduces three levels of inputs based on the lowest level of input significant to the overall fair value:

      ● Level 1 – quoted prices for similar instruments,

      ● Level 2 – directly observable market inputs other than Level 1 inputs,

      ● Level 3 – inputs not based on observable market data,

      ● Disclosure of fair values is not required when the carrying amount is a reasonable approximation of fair value, such as short-term trade receivables and payables, or for instruments whose fair value cannot be measured reliably.

2.5.2 Nature and Extent of Exposure to Risks Arising From Financial Instruments2.5.2.1 Qualitative Disclosures

      The qualitative disclosures describe:

      ● risk exposures for each type of financial instrument;

      ● management's objectives, policies, and processes for managing those risks; and

      ● changes from the prior period.

2.5.2.2 Quantitative Disclosures

      The quantitative disclosures provide information about the extent to which the entity is exposed to risk, based on information provided internally to the entity's key management personnel. These disclosures include:

      ● summary quantitative data about exposure to each risk at the reporting date

      ● disclosures about credit risk, liquidity risk, and market risk and how these risks are managed as further described below

      ● concentrations of risk.

2.5.2.3 Credit Risk

      Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to pay for its obligation.

      Disclosures about credit risk include:

      ● maximum amount of exposure (before deducting the value of collateral), description of collateral, information about credit quality of financial assets that are neither past due nor impaired, and information about credit quality of financial assets whose terms have been renegotiated

      ● for financial assets that are past due or impaired, analytical disclosures are required

      ● information about collateral or other credit enhancements obtained or called.

2.5.2.4 Liquidity Risk

      Liquidity risk is the risk that an entity will have difficulties in paying its financial liabilities.

      Disclosures about liquidity risk include:

      ● a maturity analysis of financial liabilities

      ● description of approach to risk management.

2.5.2.5 Market Risk

      Market risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk reflects interest rate risk, currency risk and other price risks.

      Disclosures about market risk include:

      ● a sensitivity analysis of each type of market risk to which the entity is exposed;

      ● additional information if the sensitivity analysis is not representative of the entity's risk exposure (for example because exposures during the year were different to exposures at year-end).

      IFRS 7 provides that if an entity prepares a sensitivity analysis such as value-at-risk for management purposes that reflects interdependencies of more than one component of market risk (for instance, interest risk and foreign currency risk combined), it may disclose that analysis instead of a separate sensitivity analysis for each type of market risk

2.5.2.6 Transfers of Financial Assets

      An entity shall disclose information that enables users of its financial statements:

      ● to understand the relationship between transferred financial assets that are not derecognised in their entirety and the associated liabilities;

      ● to evaluate the nature of, and risks associated with, the entity's continuing involvement in derecognised financial assets;

      ● transferred financial assets that are not derecognised in their entirety;

      ● required disclosures include description of the nature of the transferred assets, nature of risk and rewards as well as description of the nature and quantitative disclosure depicting relationship between transferred financial assets and the associated liabilities;

      ● transferred financial assets that are derecognised in their entirety;

      ● required disclosures include the carrying amount of the assets and liabilities recognised, fair value of the assets and liabilities that represent continuing involvement, maximum exposure to loss from the continuing involvement as well as maturity analysis of the undiscounted cash flows to repurchase the derecognised financial assets;

      ● additional disclosures are required for any gain or loss recognised at the date of transfer of the assets, income or expenses recognise from the entity's continuing involvement in the derecognised financial assets as well as details of uneven distribution of proceed from transfer activity throughout the reporting period.

      Note: The above disclosure requirements do not take into consideration the additional disclosure requirements of IFRS 9.

      2.6 IFRS 8 Segment Reporting

      An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

      An entity shall disclose the following for each period for which a statement of comprehensive income is presented:

      a. general information as described,

      b. information about reported segment profit or loss, including specified revenues and expenses included in reported segment profit or loss, segment assets, segment liabilities and the basis of measurement,

      c. reconciliations