Subject 7. Presentation and Disclosures

Property, Plant, and Equipment (PP&E)

IAS 16 provides a long list of disclosure requirements for PP&E. For each class of PP&E, the financial statements must disclose the following:

  • the measurement bases used for determining the gross carrying amount.
  • the depreciation methods and rates or useful lives.
  • the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period.
  • the detailed reconciliation of the carrying amount at the beginning and end of the period (showing, for example, additions, depreciation, impairment losses, revaluation information, foreign currency translation impacts, and so on).

U.S. GAAP require a company to disclose the depreciation expense for the period, the balances of assets, accumulated depreciation and a general description of the depreciation method(s) used.

Intangible Assets

IAS 38 provides a considerable set of disclosure requirements for intangible assets. For each class of intangibles, and distinguishing between internally generated and other assets, the financial statements must disclose:

  • whether the useful lives are indefinite or finite and, if finite, the length of the useful lives or the amortization rates used.
  • the amortization methods used for intangible assets with finite useful lives.
  • the gross carrying amount and any accumulated amortization (aggregated with accumulated impairment losses) at the beginning and end of the period.
  • the line item(s) of the statement of comprehensive income in which any amortization of intangible assets is included.
  • detailed reconciliation of the carrying amount at the beginning and end of the period (showing, for example, additions, amortization, impairment losses, revaluation information, foreign currency translation impacts, and so on).

Under U.S. GAAP, a company is required to disclose the gross carrying amounts and accumulated amortization, the aggregated amortization expense for the period, and the estimated amortization expense for the next 5 years.

Impairment of Assets

As with most other standards, IAS 36 provides a long list of disclosure requirements. To begin with, for each class of assets, the financial statements must disclose:

  • the amount of impairment losses and reversals recognized in profit or loss during the period and the line item(s) of the statement of comprehensive income in which those impairment losses and reversals are included.
  • the amount of impairment losses and reversals on revalued assets recognized in other comprehensive income during the period.

U.S. GAAP require a company to disclose a description of the impaired asset, what caused impairment, the method of determining fair value, the amount of impairment loss, and where the loss is recognized on the financial statements.

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