Section 11 – Disclosure Checklist

Section 11 – Basis Financial Instruments

Ref

1.      

An entity shall disclose, in the summary of significant accounting policies, the measurement basis (or bases) used for financial instruments and the other accounting policies used for financial instruments that are relevant to an understanding of the financial statements.

11.40

2.      

An entity shall disclose the carrying amounts of each of the following categories of financial assets and financial liabilities at the reporting date, in total, either in the statement of financial position or in the notes:

a)   financial assets measured at fair value through profit or loss (paragraphs 11.14(b), 11.14(d)(i), 12.8 and 12.9);

b)   financial  assets  that  are  debt  instruments  measured  at  amortised  cost (paragraph 11.14(a));

c)   financial assets that are equity instruments measured at cost less impairment (paragraphs 11.14(d)(ii), 12.8 and 12.9);

d)   financial liabilities measured at fair value through profit or loss (paragraphs 11.14(b), 12.8 and 12.9). Financial liabilities that are not held as part of a trading portfolio and are not derivatives shall be shown separately;

e)   financial liabilities measured at amortised cost (paragraph 11.14(a)); and

f)   loan commitments measured at cost less impairment (paragraph 11.14(c)).

11.41

3.      

An entity shall disclose information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and performance (for example, for long term debt such information should include the terms and conditions of the debt instrument (such as interest rate, maturity, repayment schedule, and restrictions that the debt instrument imposes on the entity).

11.42

4.      

For all financial assets and financial liabilities measured at fair value, the entity shall disclose the basis for determining fair value, eg quoted market price in an active market or a valuation technique. When a valuation technique is used, the entity shall disclose the assumptions applied in determining fair value for each class of financial assets or financial liabilities.

11.43

5.      

If a reliable measure is no longer available for ordinary or preference shares measured at fair value through profit and loss, the entity shall disclose that fact.

11.44

6.      

When an entity has pledged financial assets as collateral for liabilities or contingent liabilities, it shall disclose the following:

(a) the carrying amount of the financial assets pledged as collateral; and

(b) the terms and conditions relating to its pledge.

11.45

7.      

When an entity has pledged financial assets as collateral for liabilities or contingent liabilities, it shall disclose the following:

a)    the carrying amount of the financial assets pledged as collateral; and

b)    the terms and conditions relating to its pledge.

11.46

8.      

For loans payable recognised at the reporting date for which there is a breach of terms or default of principal, interest, sinking fund, or redemption terms that has not been remedied by the reporting date, an entity shall disclose the following:

(a) details of that breach or default;

(b) the carrying amount of the related loans payable at the reporting date; and

(c) whether the breach or default was remedied, or the terms of the loans payable were renegotiated, before the financial statements were authorised for issue.

11.47

9.      

An entity shall disclose the following items of income, expense, gains or losses:

a)    income, expense, net gains or net losses, including changes in fair value, recognised on:

                      i.        financial assets measured at fair value through                                         profit or loss;

                     ii.        financial liabilities measured at fair value through                                    profit or loss (with separate disclosure of movements                                on those which are not held as part of a trading                                        portfolio and are not derivatives);

                    iii.        financial assets measured at amortised cost; and

                    iv.        financial liabilities measured at amortised cost;

b)    total interest income and total interest expense (calculated using the effective interest method) for financial assets or financial liabilities that are not measured at fair value through profit or loss; and

c)    the amount of any impairment loss for each class of financial asset. A class of financial asset is a grouping that is appropriate to the nature of the information disclosed and that takes into account the characteristics of the financial assets.

11.48

10.   

The following disclosures are required only for financial instruments at fair value through profit or loss that are not held as part of a trading portfolio and are not derivatives:

a)    The amount of change, during the period and cumulatively, in the fair value of the financial instrument that is  attributable to changes in the credit risk of that instrument, determined either:

                      i.  as the amount of change in its fair value that is not                          attributable to changes in market conditions that                              give rise to market risk; or

                     ii.        using an alternative method the entity believes more                                 faithfully represents the amount of change in its fair                                 value that is attributable to changes in the credit                                       risk of the instrument.

b)    The method used to establish the amount of change attributable to changes in own credit risk, or, if the change cannot be measured reliably or is not material, that fact.

c)    The difference between the financial liability’s carrying amount and the amount the entity would be contractually required to pay at maturity to the holder of the obligation.

d)    If an instrument contains both a liability and an equity feature, and the instrument has multiple features that substantially modify the cash flows and the values of those  features  are  interdependent  (such  as  a  callable  convertible  debt instrument), the existence of those features.

e)    Any difference between the fair value at initial recognition and the amount that would be determined at that date using a valuation technique, and the amount recognised in profit or loss.

f)     Information that enables users of the entity’s financial statements to evaluate the nature and extent of relevant risks arising from financial instruments to which the entity is exposed at the end of the reporting period. These risks typically include, but are not limited to, credit risk, liquidity risk and market risk. The disclosure should include both the entity’s exposure to each type of risk and how it manages those risks.

11.48A