What must be disclosed for financial instruments as per IFRS 7?

The requirement to disclose the carrying amount for each category of financial instruments is important under IFRS 7 because it provides users of financial statements with critical information regarding the financial position of the entity. The carrying amount represents the value at which financial instruments are recognized in the balance sheet, and disclosing it for different categories enhances transparency and comparability. This information helps stakeholders assess the risks associated with those financial instruments and understand their potential impact on the entity's financial performance and position.

By categorizing financial instruments, such as into categories like "loans and receivables," "financial assets at fair value through profit or loss," or "financial liabilities," users can gauge the entity's exposure to credit risk, liquidity risk, and market risk. In addition, the disclosure of the carrying amount facilitates an analysis that encompasses both the organization's approach to managing financial risk and its leverage in the context of its overall capital structure.

Considering the other options, historical cost is not a requirement for disclosure under IFRS 7 because entities may report financial instruments at fair value or amortized cost, depending on their classification. An auditor’s report is not directly related to the financial instrument disclosures themselves but rather to the overall financial statements' accuracy, while market trends are not specified as a