IFRS 7 applies to all recognised and unrecognised financial instruments (including contracts to buy or sell non-financial assets) except: · Interests in subsidiaries, associates or joint ventures, where IAS 27/28 or IFRS 10/11 permit accounting in accordance with IAS 39/IFRS 9 · Assets and liabilities resulting from IAS 19 · Insurance contracts in accordance with IFRS 4 (excluding embedded derivatives in these contracts if IAS 39/IFRS 9 require separate accounting) · Financial instruments, contracts and obligations under IFRS 2, except contracts within the scope of IAS 39/IFRS 9 · Puttable instruments (IAS 32.16A-D).
All financial instruments measured at fair value must be classified into the levels below (that reflect how fair value has been determined): · Level 1: Quoted prices, in active markets · Level 2: Level 1 quoted prices are not available but fair value is based on observable market data · Level 3: Inputs that are not based on observable market data. A financial Instrument will be categorised based on the lowest level of any one of the inputs used for its valuation. The following disclosures are also required: · Significant transfers of financial instruments between each category – and reasons why · For level 3, a reconciliation between opening and closing balances, incorporating; gains/losses, purchases/sales/settlements, transfers · Amount of gains/losses and where they are included in profit and loss · For level 3, if changing one or more inputs to a reasonably possible alternative would result in a significant change in FV, disclose this fact.
Qualitative disclosure · Exposure to risk and how it arises · Objectives, policies and processes for managing risk and method used to measure risk.
Quantitative disclosure · Summary of quantitative data about exposure to risk based on information given to key management · Concentrations of risks.