I believe that one of the benefits of IFRS 7 was that it sought to improve the disclosures to the balances in the statement of financial position as it allowed a reader of the financial statement to view the risks associated with the assets which were not easily understood or identifiable as well as the commitments regarding the liabilities of the entities. Some of the risks which are associated with assets relate to the currencies in which the various classes of assets are held or the rate of interest or the maturity profile of the assets or the periods in which the assets mature. Commitments could arise from the covenants under which loans were granted, or the terms of repayments, variability of interest rates, currency of borrowing as well as currency of repayment to name a few. Also with respect to liabilities on the whole, the maturity profile of the liabilities as well as the currency of the liability impacts on the risk. If one has studied economic theory and views the scenarios of business planning or cash flow modelling along the lines of factors which can be changed in the short and medium term which is one of the fundamental concepts of economics, then as a planning tool the analysis of the financial statements or planned deliverables can allow for teams to understand the decisions which are to be made in the various areas in which they operate.
Even before the advent of these standards, in auditing multinationals, auditors were aware of the risks with respect to inflation and the sourcing of foreign currencies and the impact of these assessments on the decisions made by the parent companies as well as the going concern of the company.
With the adoption of International Financial Reporting Standards for Small and Medium Sized Entities, the disclosures which are required under IFRS 7 as well as the benefits of the information which were previously disclosed may not be retained as the information may not be readily available going forward.
Of course one of the prudent approaches to dealing with the risks associated with assessing financial statements and the risks of loss arising on changes in the value of share may be to treat your investments as though you were going to be faced with a major hurricane which would wipe out access to cash via Automatic Teller Machines or Banks and keep sufficient cash at home to fund immediate expenses while reassessing your needs.