Risks in Financial Assets Transfer Made Visible for Stakeholders
Users of financial statements can now evaluate the risk exposure arising from the transfer of financial assets as the Accounting Standards Board (ASB) of the FRC has amended FRS 29 (IFRS 7), ‘Financial Instruments: Disclosures’.
The amendments published today add to the requirements to that standard in relation to disclosures on transfers of financial assets, the FRC said in a statement.
“The amendments enhance the information currently provided in financial statements in relation to risk exposures arising from transfers of financial assets by an entity. This will enable users of financial statements to evaluate an entity’s risk exposure arising from transfers of financial assets, as well as any resulting impact on the financial position.”
The amendments came following move by the International Accounting Standards Board (IASB) to amend the disclosure requirements in International Financial Reporting Standard (IFRS) 7 ‘Financial Instruments: Disclosures’ on October 2010.
According to FRC, the two separate amendments are “identical” since the requirements in FRS 29 are converged with those in IFRS 7.
This “would ensure that the requirements in the two standards do not diverge,” the FRC added.
Entities are required to apply the amendments for annual periods beginning on or after July 1, 2011.
Last month, the APB has issued a revision of Practice Note 27 “The audit of credit unions in the United Kingdom” that provides guidance for the audits of credit unions in the UK, many of which are undertaken by smaller audit firms.