FRSC Provides Transitional Relief on Disclosure of

The Financial Reporting Standards Council has approved an amendment to the transition provisions of PFRS 7, Financial Instruments: Disclosures, that gives transitional relief with respect to the presentation of comparative information for the new risk disclosures about the nature and extent of risks arising from financial instruments.

PFRS 7 consolidates the existing disclosure requirements of PAS 30, Disclosures in the Financial Statements of Banks and Similar Financial Institution, and PAS 32, Financial Instruments: Disclosure and Presentation and adds some significant and challenging new disclosures. Concerns were raised on the requirement to present comparative information for the disclosures required by PFRS 7. PFRS 7 was approved in December 2005 and is effective for annual periods beginning on or after January 1, 2007. The Council acknowledged that entities may not have sufficient time to gather the required information to be presented for comparative purposes. New systems and processes to capture the required data particularly for some of the more complex disclosures may not yet be in place, requiring more time for information gathering.

In response to these concerns, the Council agreed to give transition relief with respect to the presentation of comparative information for the new risk disclosures about the nature and extent of risks arising from financial instruments in paragraphs 31–42 of PFRS 7. Accordingly, an entity that applies PFRS 7 for annual periods beginning on or after January 1, 2007 need not present comparative information for the disclosures required by paragraphs 31-42, unless the disclosure was previously required under PAS 30 or PAS 32.

The Preface to PFRS 7 has been amended to include the transitional relief approved by the FRSC. The Amendment to PFRS 7 has been forwarded to the Board of Accountancy and Professional Regulation Commission for approval.