IFRS 7 Financial Instruments: Disclosures — Key Requirements and Examples

Scope and level of detail

The standard applies to all entities and all types of financial instruments except, among others, interests in subsidiaries, associates and joint ventures accounted for under IFRS 10, IAS 27 or IAS 28, employers' rights and obligations under employee benefit plans (IAS 19), and insurance contracts within IFRS 17 (para. 3).

Where the standard requires disclosures by class, the entity groups instruments into classes appropriate to the nature of the information disclosed and provides enough information to reconcile them to the line items in the statement of financial position (para. 6). This is the key to a sensible volume: classes follow the nature of the instruments, not every ledger account.

Significance for financial position and performance

The first block shows how much financial instruments affect position and performance (para. 7).

• Carrying amounts by IFRS 9 category: at fair value through profit or loss, at amortised cost, at fair value through other comprehensive income, separately for assets and liabilities (para. 8).
• Offsetting: information on the effect of netting arrangements on the financial position (para. 13B).
• Collateral: the carrying amount of financial assets pledged as collateral and the terms of the pledge (para. 14).
• Defaults and breaches: for loans payable recognised, details of any defaults, the carrying amount of loans in default at the reporting date, and whether the default was remedied or terms renegotiated before the statements were authorised (para. 18).
• Income and expense: net gains and losses by category, total interest income and expense under the effective interest method, fee income and expense (para. 20).
• Accounting policies: the measurement basis (or bases) for financial instruments may be material accounting policy information (para. 21).
• Fair value: for each class of assets and liabilities, disclosed in a way that permits comparison with the carrying amount (para. 25).

Risks: qualitative and quantitative disclosures

The second block covers the nature and extent of risks the entity is exposed to at the period end (para. 31). The disclosures focus on risks and how they are managed; typically credit risk, liquidity risk and market risk, though the list is not closed (para. 32).

For each type of risk the entity discloses: the exposures and how they arise; its objectives, policies and processes for managing the risk and the methods used to measure it; and any changes from the previous period (para. 33). Quantitative data are summary data about the exposure at the reporting date, based on information provided internally to key management personnel such as the board or chief executive, plus concentrations of risk (para. 34). If period-end data are unrepresentative of the exposure during the year, the entity provides further information (para. 35).

Credit risk and expected credit losses

For instruments subject to the impairment requirements of IFRS 9, the disclosures should help users understand the effect of credit risk on the amount, timing and uncertainty of future cash flows (para. 35B). This is the most extensive part of the standard.

• Credit risk management practices and how they relate to the recognition and measurement of expected credit losses (para. 35F).
• The inputs, assumptions and estimation techniques used to measure losses under section 5.5 of IFRS 9 (para. 35G).
• A table reconciling the loss allowance from the opening to the closing balance by type of instrument, with explanations (para. 35H), and how significant changes in gross carrying amounts affected the allowance (para. 35I).
• The effect of collateral and other credit enhancements on the amount of expected credit losses (para. 35K).
• The contractual amount outstanding on assets written off during the period that are still subject to enforcement activity (para. 35L).
• Gross carrying amounts by credit risk rating grade (para. 35M). For trade receivables, contract assets and lease receivables under the simplified approach in paragraph 5.5.15 of IFRS 9, the disclosure may be based on a provision matrix (para. 35N), which is the main format for most non-financial companies.

Liquidity risk

The entity discloses a maturity analysis for non-derivative financial liabilities, including issued financial guarantee contracts, showing the remaining contractual maturities; a maturity analysis for derivative liabilities where contractual maturities are essential to understanding the timing of cash flows; and a description of how it manages liquidity risk (para. 39).

The entity uses judgement to determine the number of time bands. The standard gives an example: not later than one month, later than one month and not later than three months, later than three months and not later than one year, and later than one year and not later than five years (para. B11). The table contains contractual undiscounted cash flows (para. B11D), which is why its amounts usually differ from the balance sheet.

Market risk: sensitivity analysis

For Uzbek companies with foreign-currency loans or import contracts, currency risk is usually the main one: the disclosure shows how a reasonably possible change in the soum against the dollar or euro would affect profit and equity.

• For each type of market risk (currency, interest rate, other price risk), a sensitivity analysis showing how profit or loss and equity would have been affected by reasonably possible changes in the relevant variable at the reporting date (para. 40(a)).
• The methods and assumptions used and changes from the previous period, with reasons (para. 40(b), (c)).
• If the entity uses an analysis reflecting interdependencies between variables (such as value-at-risk) to manage risk, it may disclose that instead of the paragraph 40 analysis, explaining the method, the main parameters and the limitations (para. 41).
• If the analysis is unrepresentative of the risk (for example, the year-end exposure does not reflect the exposure during the year), the entity discloses that fact and the reasons (para. 42).

Who needs this in Uzbekistan and what to watch for

IFRS statements are prepared by, among others, public interest entities: from 1 January of the year following their inclusion in the Register they keep their books under IFRS, and after the second year they publish financial statements together with the auditor's report (Presidential Resolution PP-282 of 15.09.2025). For them IFRS 7 is one of the most labour-intensive parts of the notes: it requires input from treasury, credit control and management reporting, not only from accounting.

The standard is amended regularly. In 2024 the IASB carried over from IAS 1 to IFRS 7 the disclosure requirements on puttable instruments classified as equity, amended the classification and measurement requirements (including for liabilities settled through electronic payment systems), and added disclosures on contracts referencing nature-dependent electricity. When preparing the statements, check which amendments are effective for your period and whether they are reflected in the edition recognised in Uzbekistan.