16Financial instruments

16 Financial instruments

(1) When applying AASB 7 Financial Instruments: Disclosures, AASB 9 Financial Instruments and AASB 132 Financial Instruments: Presentation in preparation of financial statements, reporting entities must apply subsections (2) to (8). Financial liabilities (2) Unless otherwise required under AASB 9, an entity must use the same classification, for a financial liability that existed at the end of the last reporting period that began before 1 January 2018, as the entity used for the liability for that period. Expected credit losses (3) If permitted under an AAS, entities must apply, for the following, the simplified approach for recognition of expected credit losses available under AASB 9: (a) trade receivables; (b) contract assets (subject to subsection (4)); (c) lease receivables. (4) Paragraph (3)(b) applies in relation to: (a) the first reporting period to which AASB 15 Revenue from Contracts with Customers applies; and (b) later reporting periods. Derivatives and hedging (5) Where an entity has held derivative financial instruments that are not part of a qualifying hedging arrangement at any time during the period, it must disclose: (a) the management’s objectives for holding or issuing those derivatives; (b) the context needed to understand those objectives; and (c) the strategies for achieving those objectives. Regular way purchase or sale (7) For regular way purchase or sale, entities must apply trade date accounting. Market risk sensitivity analysis (8) Where sensitivity analysis is required, entities must use the standard rates referenced in the Standard Parameters issued by Finance, unless Finance approves otherwise.