Financial Instruments Under IFRS 7 and IFRS 9: An Assessment of the Accounting Treatment of Financial Instruments With an Analysis of the Disclosure Requirements for the Credit Risk Note in Spar Nord Bank A/S's Financial Statements

Nicolai Rasmussen

Student thesis: Master thesis


The following project assesses the accounting and disclosure requirements for financial instruments under
the International Financial Reporting Standard (IFRS). The main objective of the project is an analysis of the
Danish bank, Spar Nord Bank A/S, and the needed adjustment in order to live up to the new disclosure
requirements in the standard IFRS 7.
More specifically, the project assesses the following research question: “What are the disclosure
requirements for financial instruments under IFRS 9 and IFRS 7, and how will these impact the credit risk
note for Spar Nord Bank A/S’ group financial statement?”.
The first section of the project covers the methodological framework applied in the project. This contains
the applied study design, techniques for data collection as well as a description of the project structure.
Following, this section contains a description and discussion of the accounting theory relating to the
financial report, as well as an assessment of the joint Conceptual Framework and the IASB-only
comprehensive project.
The regulatory sections examines and introduces IFRS 9 and IFRS 7. These sections study the impairment of
financial assets and financial risks in depth. With IFRS 9 as the new IFRS standard on financial instruments,
this section specifies how an entity should classify and measure financial assets and financial liabilities.
Thus, IFRS 7 contains the disclosure requirements for financial instruments and describes the updated
disclosures requirements. Additionally, it is found that the updates are rather extensive and will require
considerably more effort to complete in the future.
The conclusion demonstrates that Spar Nord needs extensive new information in their credit risk note.
Especially the information related to the banks credit risk management and qualitative as well as
quantitative information related to the bank’s expected credit loss and impairments.
Following the conclusion, the project discusses whether IFRS 9 contributes to an improvement in the
possibility to compare financial statements. Here it is found that IFRS 9 could have done more, but the
opinions varies whether this would have been reasonable. Following, a discussion on the risk of
“information overload” in the financial statements is carried out. Here it is found that the requirements are
necessary, why it is an important task for the companies, to monitor the risk of giving too much information
in their financial statements

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2018
Number of pages119