Question

State and explain 5 differences between IFRS 7 and IAS 32.

Answer 1

IFRS - 7	IAS-32
IFRS 7 was originally issued in August 2005 and applies to annual periods beginning on or after 1 January 2007.	IAS 32 was reissued in December 2003 and applies to annual periods beginning on or after 1 January 2005.
The recognition and measurement and the disclosure of financial instruments are the subjects of IFRS 9 or IAS 39 and IFRS 7 respectively.	IAS 32 specifies presentation for financial instruments.
IFRS 7 requires disclosure of a reconciliation of the allowance for credit losses for all financial Assets.	Whereas, IAS 32 requires a similar disclosure only for loans and advances
The Income statement disclosures required by IFRS 7 are more prescriptive Whereas, IFRS 7 requires disclosure of the information for all categories of financial assets and liabilities.	Than those required by IAS 32, for example - IAS requires the only disclosure of the net gains or loss of financial instruments carried at fair value through profit and loss account.
IFRS 7 Does not specifically requires disclosure on terms and conditions of the financial instruments.	Require specifically disclosure on terms and conditions of the financial instruments. Information about the extent and nature of the financial instruments including the terms and conditions that may affect the amount, timing and certainty of the future cash flows.
IFRS does not impose a presentation of categories of financial instrument in order of liquidity.	for Bank - Shall present a balance sheet that group assets and liabilities by nature and list them in order that reflects their relative liquidity.
IFRS does not require separate disclosure of certificate of deposit issued by IAS 30	Bank discloses separately deposits that have been obtained through the issue of its own certificate of deposit or other negotiable paper.
IFRS 7 does not require an entity to disclose the amount of reclassification in both directions between fair value and cost or amortized cost.	Its required here in IAS 32
IFRS does not require the disclosure of the effective interest rate on the liability component.	Required here.