Briefing Paper on FRS 29 (IFRS 7) Financial Instruments: Disclosures
26/06/2007

A briefing paper on FRS 29 (IFRS 7) Financial Instruments: Disclosures, has been prepared by the IFIA Technical Committee. The purpose of this briefing paper is to summarise and explain the new disclosures which are required under FRS 29 and to answer a number of practical questions identified and considered by the Committee. (FRS 29 is applicable for accounting periods commencing on or after 1st January 2007).

The objective of FRS 29 is to provide information to users of financial statements about an entity’s exposure to material risks and how the entity manages those risks. The FRS requires an entity to provide disclosures in its financial statements that enable users to evaluate the significance of financial instruments to the entity’s financial position and performance, and the nature and extent of risks arising from financial instruments to which the entity is exposed (quantitative disclosures) and how the entity manages those risks (qualitative disclosures). Determining which risks are material will be an important element of the process in implementing FRS 29 and it is thought it will be important to involve the investment managers in this process, as it was felt likely that they will be the source of some of the information which will require disclosure.

We are aware that many of the administrators have already commenced discussions with their auditors in respect of the implementation of this Standard and it is hoped that this briefing paper will assist in this regard.

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