CFM21505 - Accounting for corporate finance: International Financial Reporting Standards: overview

Note that the guidance on IFRS may also be applicable to users of New UK GAAP or companies that applied Old UK GAAP where certain accounting policy elections were selected. A summary of these policy choices are outlined at CFM21410 .

Overview of International Accounting Standards

The relevant International Accounting Standards relating to financial instruments are:

• IAS 32 (‘Financial Instruments: Presentation’);
• For accounting periods beginning on or after 1 January 2018 - IFRS 9 (‘Financial instruments’) and IAS 39 as amended for IFRS 9 (hedge accounting requirements only).
• For accounting periods beginning before 1 January 2018 - IAS 39 (‘Financial instruments: recognition and measurement’) the version prior to the amendments made for IFRS 9; and
• IFRS 7 (‘Financial Instruments: Disclosures’).

Accounting for financial statements is one of the most complex and controversial areas in accounting. It is an area that has seen many changes and one which is still evolving.

IAS 32 sets out the requirements for the presentation of financial instruments (for both IAS 39 and IFRS 9). Detailed guidance on IAS 32 is at CFM21200+.

CFM21510 - CFM21780 of the guidance is focussed on the classification and measurement requirements of IAS 39.

CFM21800 of the guidance is focussed on the classification and measurement requirements of IFRS 9.

IFRS 7 sets out the disclosure requirements for financial instruments. The disclosure requirements are not normally directly relevant for tax and are not covered in any detail in this manual.

The detailed provisions on derivatives (CFM24000+), hybrid debt (CFM25000+) and hedging (CFM27000+) are separately addressed in the dedicated guidance to those subjects.

Note that the guidance on IAS 39 will also apply after 1 January 2018 to those companies that have elected under FRS 102 to account for financial instruments under the requirements of IAS 39 as outlined at CFM21410. {#}