Accounting for corporate finance: derivative contracts: FRS 13 disclosure requirements: numerical disclosure
The list of potential numerical disclosures is very long, and there are probably at least as many ways of providing the required disclosures as there are companies subject to the standard. Numerical disclosures may be required in the following areas:
- interest-rate risk - for most companies, this analysis only applies for financial liabilities
- foreign currency risk - the analysis should cover net monetary assets and liabilities, subdivided by each principal functional currency used
- liquidity risk - as with interest-rate risk, for most companies, this only applies for financial liabilities
- fair values - the analysis should compare fair values with book values of all financial assets and liabilities, including those not recognised in the balance sheet
- details of financial instruments:
- used as hedges, including: unrecognised gains and losses in the balance sheet; those recognised in the balance sheet but not in the profit and loss account; those of the latter expected to be so recognised in the following year; those recognised in the current year’s profit and loss account but brought forward from previous years
- held or used for trading
- which are commodity contracts treated as financial instruments.
Accounting for financial instruments is a complex subject; if you have any problems, you should always contact your local HMRC accountant.