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The project on IFRS 7 Financial Instruments: Disclosures - Transfers of Financial Assets (previously 'Derecognition') is part of the IASB-FASB convergence project. The IASB issued in October 2010 amendments to IFRS 7 Financial Instruments: Disclosures as part of its comprehensive review of off balance sheet activities.
EFRAG had communicated its comment letter on the ED Derecognition in July 2009 and then in March 2011 EFRAG completed its due process and submitted its Endorsement Advice Letter and Effects Study Report to the European Commission.
The amendments improved the understanding of transfer transactions of financial assets (for example, securitisations) by users of financial statements, including understanding the possible effects of any risks that may remain with the entity that transferred the assets. The amendments also required additional disclosures if a disproportionate amount of transfer transactions are undertaken around the end of a reporting period.
The amendment new requirements broadly align the relevant disclosure requirements of International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP) and are contained in Disclosures—Transfers of Financial Assets (Amendments to IFRS 7).
Amendments to IFRS 7 Financial Instruments: Disclosures –Transfers of Financial Assets were officially published in the Official Journal on 23 November 2011.
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