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IASB enhances financial instruments disclosures

05 March 2009




The International Accounting Standards Board (IASB) today issued amendments that improve the disclosure requirements about fair value measurements and reinforce existing principles for disclosures about the liquidity risk associated with financial instruments.

The amendments form part of the IASB’s focused response to the financial crisis and addresses the G20 conclusions aimed at improved transparency and enhanced accounting guidance. The improvements also reflect discussions by the IASB’s Expert Advisory Panel on measuring and disclosing fair values of financial instruments when markets are no longer active.



Responding to the calls of policymakers, many investor groups and other interested parties, the IASB is bringing the disclosure requirements of International Financial Reporting Standards (IFRSs) more closely into line with US standards. The amendments to IFRS 7 Financial Instruments: Disclosures introduce a three-level hierarchy for fair value measurement disclosures and require entities to provide additional disclosures about the relative reliability of fair value measurements. These disclosures will help to improve comparability between entities about the effects of fair value measurements.

In addition, the amendments clarify and enhance the existing requirements for the disclosure of liquidity risk. This is aimed at ensuring that the information disclosed enables users of an entity’s financial statements to evaluate the nature and extent of liquidity risk arising from financial instruments and how the entity manages that risk.

The amendments to IFRS 7 apply for annual periods beginning on or after 1 January 2009. However, an entity will not be required to provide comparative disclosures in the first year of application.

Introducing the amendments, Sir David Tweedie, Chairman of the IASB, said:

The financial crisis has shown that a clear understanding of how entities determine the fair value of financial instruments, particularly when only limited information is available, is crucial to maintaining confidence in the financial markets. The additional disclosure requirements and the three-level hierarchy will help to increase the clarity of the information. The amendments will also enhance the disclosures about the liquidity risks associated with financial instruments. The proposals build on the advice we have received from the IASB’s Expert Advisory Panel.

For more information about measures undertaken by the IASB in response to the financial crisis, visit www.iasb.org. Printed copies of Improving Disclosures about Financial Instruments (Amendments to IFRS 7) (ISBN 978-1-907026-00-3) will be available shortly, at £10.00 plus shipping, from:

IASC Foundation Publications Department,
30 Cannon Street, London EC4M 6XH, United Kingdom.
Tel: +44 (0)20 7332 2730 Fax +44 (0)20 7332 2749
Email: publications@iasb.orgWeb: www.iasb.org

Press enquiries:
  • Mark Byatt , Director of Corporate Communications, IASB
    Telephone: +44 (0)20 7246 6472~
    email: mbyatt@iasb.org
  • Sonja Horn , Communications Adviser, IASB
    Telephone: +44 (0)20 7246 6463
    email: shorn@iasb.org
Technical enquiries:
  • Gavin Francis , Director of Capital Markets, IASB
    telephone: 44 (0)20 7246 6901
    email: gfrancis@iasb.org
  • Martin Friedhoff , Project Manager, IASB
    telephone: +44 (0)20 7246 6902
    email: mfriedhoff@iasb.org