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COMMISSION REGULATION (EC) No 108/2006 of 11 January 2006
amending Regulation (EC) No 1725/2003 adopting certain
international accounting standards in accordance with
Regulation (EC) No 1606/2002 of the European Parliament
and of the Council.
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Nature and Extent of Risks arising from Financial
Instruments
31. An entity shall disclose information that enables
users of its financial statements to evaluate the nature
and extent of risks arising from financial instruments
to which the entity is exposed at the reporting date.
32. The disclosures required by paragraphs 33-42 focus
on the risks that arise from financial instruments and
how they have been managed. These risks typically
include, but are not limited to, credit risk, liquidity
risk and market risk.
Qualitative
disclosures
33. For each type of risk arising from financial
instruments, an entity shall disclose:
(a) the
exposures to risk and how they arise;
(b) its
objectives, policies and processes for managing the
risk and the methods used to measure the risk; and
(c) any
changes in (a) or (b) from the previous period.
Quantitative
disclosures
34. For each type of risk arising from financial
instruments, an entity shall disclose:
(a)
summary quantitative data about its exposure to that
risk at the reporting date. This disclosure shall be
based on the information provided internally to key
management personnel of the entity (as defined in
IAS 24 Related Party Disclosures), for example the
entity’s board of directors or chief executive
officer.
(b) the
disclosures required by paragraphs 36-42, to the
extent not provided in (a), unless the risk is not
material (see paragraphs 29-31 of IAS 1 for a
discussion of materiality).
(c)
concentrations of risk if not apparent from (a) and
(b).
35. If the
quantitative data disclosed as at the reporting date are
unrepresentative of an entity’s exposure to risk during
the period, an entity shall provide further information
that is representative.
Credit risk
36. An entity
shall disclose by class of financial instrument:
(a) the
amount that best represents its maximum exposure to
credit risk at the reporting date without taking
account of any collateral held or other credit
enhancements (eg netting agreements that do not
qualify for offset in accordance with IAS 32);
(b) in
respect of the amount disclosed in (a), a
description of collateral held as security and other
credit enhancements;
(c)
information about the credit quality of financial
assets that are neither past due nor impaired; and
(d) the
carrying amount of financial assets that would
otherwise be past due or impaired whose terms have
been renegotiated.
Financial
assets that are either past due or impaired
37. An entity
shall disclose by class of financial asset:
(a) an
analysis of the age of financial assets that are
past due as at the reporting date but not impaired;
(b) an
analysis of financial assets that are individually
determined to be impaired as at the reporting date,
including the factors the entity considered in
determining that they are impaired; and
(c) for
the amounts disclosed in (a) and (b), a description
of collateral held by the entity as security and
other credit enhancements and, unless impracticable,
an estimate of their fair value.
Colletaral
and other credit enhancements obtained
38. When an
entity obtains financial or non-financial assets during
the period by taking possession of collateral it holds
as security or calling on other credit enhancements (eg
guarantees), and such assets meet the recognition
criteria in other Standards, an entity shall disclose:
(a) the
nature and carrying amount of the assets obtained;
and
(b) when
the assets are not readily convertible into cash,
its policies for disposing of such assets or for
using them in its operations.
Liquidity risk
39. An entity
shall disclose:
(a) a
maturity analysis for financial liabilities that
shows the remaining contractual maturities; and
(b) a
description of how it manages the liquidity risk
inherent in (a).
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