IFRS 7 Issues
This session aimed to seek Board's input on certain minor issues identified during the discussions on improving IFRS 7 in the light of the financial crisis. Constituents were concerned over some burdensome minimum disclosure requirements and that qualitative and quantitative disclosures are not integrated. The staff proposed a series of minor amendments. As a general amendment the staff proposed to change IFRS 7.32 by adding a statement that qualitative disclosures and quantitative disclosures should be integrated. The Board agreed.
The following list summarises the minor issues, the staff recommendation and the Board's decision:
Paragraph in IFRS 7 |
Description |
Staff Recommendation |
Board Decision |
---|---|---|---|
36(a) |
Maximum exposure to credit risk |
Clarify that disclosure only applies to assets for which their maximum exposure to credit loss differs from their carrying amounts |
Agreed |
36(d) |
Financial assets with renegotiated terms |
Remove |
Agreed |
37(a) |
Ageing analysis |
Remain unchanged |
Agreed |
37(b) |
Individually impaired financial assets |
Add a new disclosure requiring an entity to disclose an analysis of financial assets that are collectively assessed for impairment at the end of the reporting period |
Disagreed |
37(c) |
FV of collateral and other credit enhancements |
Require disclosure of over- and under-collateralisation |
Remove 37(c) but enhance IFRS 7.36 |
38 |
Foreclosed collateral |
Clarify that need only disclose amount held at reporting date |
Agreed |
40(a) |
Impact on profit or loss and equity |
State in Implementation Guidance that encouraged to discuss effect of analysis on economic value |
Disagreed |
41 |
Stress testing |
No requirement needed |
Agreed |
15 |
Selling or repledging collateral |
Remain unchanged |
Agreed |
32 |
Qualitative and quantitative disclosure |
Insert sentence stating that qualitative should support quantitative disclosure |
Agreed |
34(b) |
Materiality |
Remove reference to materiality |
Agreed |
The staff recommended to the Board to process the agreed changes via the annual improvements process. The Board agreed.