Status & recent changes
- IFRS 7 has been amended alongside IFRS 9 several times (for example, supplier finance disclosures from 2024 and classification-related amendments effective from 2026). Check the current text for details.
Objective
Requires disclosures that let users evaluate how significant financial instruments are to an entity and the nature and extent of the risks arising from them and how they are managed.
Scope
- All entities and all types of financial instruments, with the same exclusions as IAS 32 (e.g. interests in subsidiaries, most employee benefits, share-based payments).
Key definitions
- Credit risk
- The risk that one party to a financial instrument causes a loss to the other by failing to meet an obligation.
- Liquidity risk
- The risk that an entity will struggle to meet obligations on its financial liabilities that are settled in cash or another financial asset.
- Market risk
- The risk that fair value or future cash flows fluctuate because of market prices; it comprises currency risk, interest rate risk and other price risk.
Recognition & measurement
What must be shown
- Carrying amounts by measurement category (amortised cost, FVOCI, FVTPL).
- Items of income, expense, gains and losses by category, including interest and impairment.
- Accounting policies, hedge accounting information, and fair values (with the IFRS 13 hierarchy).
- Qualitative disclosures: exposure to each risk, how it arises, objectives, policies and processes for managing it.
- Quantitative disclosures: summary data on exposures, credit risk (including expected credit loss information), a maturity analysis for liquidity risk, and a sensitivity analysis for each type of market risk.
- Transfers of financial assets that are not fully derecognised, and offsetting information.
Key disclosures
- IFRS 7 is itself a disclosure standard; the items above are its key requirements.
Common exam traps
- IFRS 7 contains disclosures only — classification is in IAS 32 and recognition and measurement in IFRS 9.
- Liquidity disclosures use contractual undiscounted cash flows, not carrying amounts.
Practise MCQs on this standard
Test your understanding of IFRS 7 with free chapter-wise MCQs and explanations in these question banks.
CAF-6 Corporate ReportingICAP CAFACCA FR Financial ReportingACCACA Inter P1 Advanced AccountingICAI CA Intermediate
ICAI CA Intermediate examines Indian Accounting Standards, which are based on but can differ from IFRS. Check your syllabus.