Financial Instruments for Disclosures †Free Samples to Students

Question: Discuss about the Financial Instruments for Disclosures. Answer: Introduction: There are two matters in which the change in accounting policy and disclosure requirements has been listed. One is change in the method of accounting of cash flow hedges and the other one is the loss of data from the non current asset register. These two are interlinked in the sense that the hedge items are grouped under the head asset or liability depending upon the nature of the item (AASB, 2014). In the given case, there may be some items which may have been classified as noncurrent asset. The first disclosure that is advised is as follows: Specify the documents which have been destroyed. Specify the name and nature of the noncurrent assets that have been destroyed along with the quantum and amount. The reason for the loss of data shall be specified along with date of its occurrence. The second disclosure that is advised is as follows: The change in accounting policy regarding the hedge accounting shall be disclosed. As per International Financial Reporting Standard 7 and paragraph 23 it is stated that in case the profit or loss in cash flow hedges is recognized in the statement of the other comprehensive income then the following disclosures shall be made: The amount that was so recognized in the reporting period. The amount which is included in the statement of the profit and loss and removed from equity. The amount transferred from the equity and included in the initial measurement of hedge instruments (IFRS 7, 2013). The effect of changes so made in the financial statements of the company. References IFRS 7, (2013), Financial Instruments: Disclosures, available on https://www.iasplus.com/en/standards/ifrs/ifrs7 accessed on 13/04/2018. AASB, (2014), Hedge Accounting available on https://www.aasb.gov.au/admin/file/content105/c9/IASB_Draft_IFRS_General_Hedge_Accounting_09-12.pdf accessed on 14/04/2018.