Nature and extent of risks

Learning objectives

• Explain that the entity discloses information that enables users to evaluate the nature and extent of risks at the end of the reporting period.L1
• Identify the types of risk (credit, liquidity, market) to be documented for a given portfolio.L1

Normative references

• IFRS 7 §31Second objective of the Standard: to disclose information that enables users to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed at the end of the reporting period.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• The disclosures on the nature and extent of the risks arising from financial instruments concern the exposure at the date of initial recognition of each instrument.L1
• What is the second part of the objective of IFRS 7, alongside the significance of financial instruments for financial position and performance?L1
• A regional bank mainly holds loans, deposits and interest rate derivatives. A colleague comments on the risks to be documented at the reporting date. Which of the colleague's sentences is wrong?L1