Disclosure
General
The financial
statements will disclose, for each class of property, plant and equipment:
(1) the measurement bases used for determining
the gross carrying amount;
(2) the depreciation methods used;
(3) the useful lives, or the depreciation rates
used;
(4) the gross carrying amount and the
accumulated depreciation (aggregated with accumulated impairment losses) at the
beginning, and end, of the period; and
(5) a reconciliation of the carrying amount at
the beginning and end of the period showing:
(i) additions;
(ii) disposals;
(iii) acquisitions through business combinations;
(iv) increases, or decreases, resulting from
revaluations and from impairment losses recognized, or reversed, directly in
equity under IAS 36;
(v) impairment losses recorded in the income
statement under IAS 36;
(vi) impairment losses reversed in the income
statement under IAS 36;
(vii) depreciation;
(viii) the net exchange differences arising on the
translation of the financial statements from the functional currency into a
different presentation currency, including the translation of a foreign
operation into the presentation currency of the reporting undertaking; and
(ix) other changes.
The financial
statements will also disclose:
(1)
the existence and amounts of restrictions on title,
and property, plant and equipment pledged as security for liabilities;
(2)
the amount of expenditures recorded in the carrying
amount in the course of its construction;
(3)
the amount of contractual commitments for the
acquisition of property, plant and equipment; and
(4)
if it is not disclosed separately on the face of the
income statement, the amount of compensation from third parties for items that
were impaired, lost or given up that is included in the income statement.
Depreciation
Selection of the
depreciation method and estimation of the useful life of assets are matters of
judgement. Therefore, disclosure of the methods adopted, and the estimated
useful lives, or depreciation rates, should be disclosed. Also, it is necessary
to disclose:
(1) depreciation, whether recorded in the income statement or as a part of
the cost of other assets, during a period; and
(2) accumulated depreciation at the end of the period.
Accounting estimates
Under IAS 8, an
undertaking discloses the nature and effect of a change in an accounting
estimate that has an effect in the current period, or will have an effect in
subsequent periods. For property, plant and equipment, such disclosure may
arise from changes in estimates with respect to:
(1) residual values;
(2) the estimated costs of dismantling,
removing, or restoring items;
(3) useful lives; and
(4) depreciation methods.
Revaluation
If items are stated
at revalued amounts, the following will be disclosed:
(1)
the effective date of the revaluation;
(2)
whether an independent valuer was involved;
(3)
the methods, and significant assumptions, applied in
estimating the items’ fair values;
(4)
the extent to which the items’ fair values were
determined directly by reference to observable prices in an active market, or
recent market transactions on arm’s length terms, or were estimated using other
valuation techniques;
(5)
for each revalued class of property, plant and
equipment, the carrying amount that would have been recorded had the assets
been carried under the cost model; and
(6)
the revaluation surplus, indicating the change for the
period, and any restrictions on the distribution of the balance to
shareholders.
Under IAS 36, an
undertaking discloses further information on impaired property, plant and
equipment.
Undertakings are
encouraged to disclose the following information:
(1) the carrying amount of temporarily idle
property, plant and equipment;
(2) the gross carrying amount of any fully
depreciated items still in use;
(3) the carrying amount of items retired from
active use and held for disposal; and
(4)
when the cost model is used, the fair value of
property, plant and equipment, when this is materially different from the
carrying amount.
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