Financial Reporting · Financial Instruments: Disclosures

Ind AS 107 Differences from IFRS 7

Updated 5 October 2026 · Fact-checked

Ind AS 107 follows IFRS 7 closely. Its differences, shown in the Standard's comparison with IFRS 7, are largely consequential on other Ind AS: Indian terminology and references, and carve-outs in Ind AS 32 and Ind AS 109 that flow through. State the IFRS position, the Ind AS position, and the reason.

Understand Ind AS 107 Differences from IFRS 7

Ind AS 107 is the Indian version of IFRS 7. Both require an entity to disclose two things: how significant its financial instruments are to its financial position and performance, and the nature and extent of the risks they create (credit, liquidity and market risk). The disclosure framework is the same.

So this topic is a short comparison, not a new set of rules. The differences between Ind AS 107 and IFRS 7 are shown in the Standard's comparison with IFRS 7. They are largely consequential on other Ind AS. You are tested on whether you can name the departures and explain why they exist.

A useful way to organise the differences is in three groups. First, terminology: Ind AS uses Indian statement names such as 'balance sheet' and 'statement of profit and loss' where IFRS uses 'statement of financial position' and 'statement of comprehensive income'. Second, references and dates: Ind AS 107 refers to other Ind AS (for example Ind AS 109, Ind AS 113, Ind AS 101) instead of IFRSs, and its effective-date and transition wording may be adapted to India. Third, flow-through carve-outs: where Ind AS 32 or Ind AS 109 departs from IAS 32 or IFRS 9, the classification or measurement changes, and so do the amounts and classes you disclose under Ind AS 107.

The flow-through point matters most in exams. Ind AS 107 does not create a new disclosure just because India has a carve-out elsewhere. The disclosure changes because the underlying accounting under Ind AS 32 or 109 is different. Always trace a disclosure back to the classification that drives it.

A standard example is the Ind AS 32 carve-out for foreign currency convertible bonds. Under Ind AS 32, a conversion option is classified as an equity instrument if it entitles the holder to a fixed number of the issuer's equity shares for a fixed amount of foreign currency. This holds even though that currency differs from the issuer's functional currency (for example, where the functional currency is the Indian rupee). Under IAS 32 the amount is not fixed in the functional currency, so the option would be a derivative liability. Verify the exact wording in the Standard. Ind AS 107 disclosures then follow the Ind AS classification.

For the exact list of differences, read the Standard's comparison with IFRS 7 once from your ICAI material and learn it in your own words. Do not add differences from memory that you cannot find there.

Key rules to remember

Core relationship: Ind AS 107 = IFRS 7 disclosure framework + Indian terminology and references + effects of Ind AS carve-outs elsewhere; Use this as your answer skeleton. Do not claim Ind AS 107 has a different risk-disclosure framework.
Terminology mapping: Statement of financial position → Balance sheet; Statement of comprehensive income → Statement of profit and loss (with OCI); Ind AS 1 and Schedule III (Division II) use the Indian names.
Cross-reference rule: IFRS 9 → Ind AS 109; IAS 32 → Ind AS 32; IFRS 13 → Ind AS 113; IFRS 1 → Ind AS 101; Disclosure paragraphs point to the Ind AS equivalents.
Flow-through rule: Carve-out in Ind AS 32 / Ind AS 109 → different classification or measurement → different Ind AS 107 disclosure amounts; The disclosure changes because the accounting changes.
Risk disclosure structure (same in both): Significance of instruments + Nature and extent of risks (credit, liquidity, market); No difference in structure between Ind AS 107 and IFRS 7.

How to solve Ind AS 107 Differences from IFRS 7 questions

Use this method for any question that asks you to compare Ind AS 107 with IFRS 7 or to apply a difference to a case.

1Identify what the question asks: a list of differences, or a disclosure in a given case.
2State the common base: both standards require disclosures on the significance of instruments and on risks.
3Name the difference and place it in a group: terminology, reference or date, or flow-through carve-out.
4For a flow-through carve-out, name the standard where the departure sits (Ind AS 32 or Ind AS 109) and state the accounting under Ind AS and under IFRS.
5Apply to the facts: say which classification or amount the entity uses, and so what it discloses under Ind AS 107.
6Conclude in one line on what the entity discloses, and note that the risk-disclosure framework is unchanged.

Quickest way: Three-bucket recall

When to use it: When you have under five minutes for a short note or a theory MCQ on differences.

Write three headings in your head: Terms, References and dates, Carve-outs elsewhere.
Under Terms, give one example (balance sheet vs statement of financial position).
Under References, say Ind AS 107 points to Ind AS, not IFRSs.
Under Carve-outs, give one example from Ind AS 32 or Ind AS 109 and its disclosure effect.
Close with: framework and risk disclosures are the same.

Common mistakes in Ind AS 107 Differences from IFRS 7

Saying Ind AS 107 has fewer or different risk disclosures than IFRS 7.
Students assume 'carve-out' means the whole standard is altered.
Fix: State that credit, liquidity and market risk disclosures are the same in substance. The differences are limited to those in the comparison appendix.
Listing differences from memory that are not in the appendix.
Mixing up differences from Ind AS 32, 109, 115 and 107.
Fix: Keep the appendix list of Ind AS 107 separate. Mention other standards' carve-outs only as flow-through effects.
Using IFRS terms such as 'statement of financial position' in an Ind AS answer.
IFRS texts and reference books use IFRS names.
Fix: Use balance sheet and statement of profit and loss in all Ind AS answers.
Treating a carve-out in Ind AS 32 as a disclosure carve-out in Ind AS 107.
The disclosure is affected, so it looks like the difference sits in Ind AS 107.
Fix: Say that the classification differs under Ind AS 32, and that Ind AS 107 disclosures then follow that classification.
Giving a long list of differences with no reason.
Students memorise points without understanding them.
Fix: For each difference give the IFRS position, the Ind AS position and one line on why.

Worked examples

Example 1

Case: Veda Ltd, an Ind AS company, is drafting its financial instruments note. A junior has headed the disclosure of financial assets by category as 'Statement of financial position' and refers to the 'statement of comprehensive income' for gains and losses. The senior asks you to correct this and state whether the substance of the disclosure changes.

Show the solution

Identify the issue: IFRS terminology has been used in an Ind AS financial statement.
Ind AS 107 and Ind AS 1 use 'balance sheet' and 'statement of profit and loss' (with other comprehensive income shown as part of it).
Correct the headings: use 'balance sheet' for the classification of financial assets and liabilities, and 'statement of profit and loss' for gains, losses and interest.
Substance: this is a terminology difference only. The disclosure requirements and the risk framework of IFRS 7 and Ind AS 107 are the same.

Answer: Replace the IFRS names with 'balance sheet' and 'statement of profit and loss'. The change is one of terminology only. The disclosures required do not change.

Example 2

Case: Rudra Ltd, an Ind AS company whose functional currency is the Indian rupee, issued foreign currency convertible bonds. The principal is fixed in a foreign currency, and the holder can convert the bonds into a fixed number of Rudra's equity shares. The CFO asks whether Ind AS 107 gives a special rule for these bonds, or whether the effect comes from somewhere else.

Show the solution

Locate the source: classification of the conversion option is decided under Ind AS 32, not Ind AS 107.
Recall the Ind AS 32 carve-out for foreign currency convertible bonds. If the conversion option entitles the holder to a fixed number of Rudra's equity shares for a fixed amount of foreign currency, the option is classified as an equity instrument, even though that currency differs from Rudra's functional currency (the rupee). IAS 32 would treat the option as a derivative liability, because the amount is not fixed in the functional currency. Confirm the exact wording in your ICAI text.
Check the condition: the carve-out applies because a fixed amount of foreign currency is exchanged for a fixed number of shares. If the number of shares or the amount of foreign currency could vary, the carve-out would not apply, and you would classify the option under the general rules of Ind AS 32.
Apply the flow-through rule: the option is shown within equity, not as a derivative liability at fair value through profit or loss. The liability component (the bond host) is classified and measured as a financial liability in the usual way. Ind AS 107 disclosures follow these Ind AS classifications.
Conclude that Ind AS 107 itself contains no special rule for the option. Its disclosures reflect the classification made under Ind AS 32.

Answer: The difference arises from the Ind AS 32 carve-out, not from Ind AS 107. Because the option entitles the holder to a fixed number of equity shares for a fixed amount of foreign currency, it is classified as equity even though that currency is not Rudra's functional currency. IAS 32 would require a derivative liability. The bond host remains a financial liability. Ind AS 107 disclosures follow that classification, and the risk-disclosure framework is unchanged.

Exam tips

Open every comparison answer with the shared base: same objective, same risk structure. It shows you understand the standard and earns the opening mark.
Use the three groups (terms, references and dates, carve-outs elsewhere) as sub-headings so the examiner can find each point.
In case MCQs, ask whether the difference is a label or a real change in accounting. Labels do not change amounts.
Learn two or three appendix items thoroughly rather than many loosely. Check them against the comparison appendix in the Standard.
Never state an Ind AS 107 paragraph number unless you are sure of it. Naming the standard and the rule is enough for marks.

Practice questions from Financial Instruments: Disclosures

Ind AS 107 Differences from IFRS 7: frequently asked questions

What is the main difference between Ind AS 107 and IFRS 7?

Both use the same disclosure framework. Ind AS 107 differs in terminology, in cross-references to Ind AS, and through the effect of carve-outs in standards such as Ind AS 32 and Ind AS 109. The exact items are shown in the Standard's comparison with IFRS 7.

Does Ind AS 107 have its own carve-outs?

Mostly the differences are adaptations and flow-through effects of other Ind AS rather than new disclosure rules. Check the Standard's comparison with IFRS 7 in your ICAI text for the exact items, and learn them in your own words.

Why does ICAI show a comparison of Ind AS 107 with IFRS 7?

Ind AS are converged with IFRS but not identical. The comparison shows where the Indian text departs, so preparers and users can see how far an Ind AS company complies with IFRS 7. The differences are largely consequential on other Ind AS. Check how your ICAI text presents it.

How should I write this in a 5-mark answer?

State the common base in one line. Then give three or four differences, each with the IFRS position, the Ind AS position and a reason. Close with a line saying the risk-disclosure framework is unchanged.