Setters bring financial instruments standard in line

STANDARD SETTERS have amended the rules relating to financial instruments and the transfer of assets, with a view to improving risk reporting.

FRS 29 is equivalent to International Financial Reporting Standard 7 and its requirements are converged with the global rule, meaning the UK standard setter’s amendments are identical to those of the International Accounting Standards Board.

The changes govern disclosures on transfers of financial assets and are designed to boost information on risk arising from such activities, enabling stakeholders to evaluate a company’s exposure and the impact on its bottom line.

The IASB made its changes to IFRS 7 in October 2010 and the Accounting Standards Board is bound to follow suit; companies are required to apply the amendments for annual periods starting on or after 1 July this year.

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Fiona Westwood of Smith and Williamson.