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Guide to Annual Financial Statements – Disclosure Checklist 2016

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Guide to Annual Financial Statements – Disclosure Checklist 2016 Disclosure checklist Guide to annual financial statements IFRS® October 2016 kpmg.com/ifrs Contents About this guide 1 6 Voluntary early adoption of IFRSs 127 6.1 Disclosure Initiative (Amendments to IAS 7) 127 References and abbreviations 3 6.2 Recognition of Deferred Tax Assets for The checklist 4 Unrealised Losses (Amendments to IAS 12) 128 6.3 IFRS 15 Revenue from Contracts with 1 General presentation 4 Customers 128 1.1 Presentation of financial statements 4 6.4 IFRS 9 Financial Instruments (2014) 133 1.2 Changes in equity 17 6.5 IFRS 9 Financial Instruments (2013) 160 1.3 Statement of cash flows 18 6.6 IFRS 9 Financial Instruments (2010) 182 1.4 Basis of accounting 23 6.7 IFRS 9 Financial Instruments (2009) 201 1.5 Fair value measurement 29 6.8 IFRS 9 Financial Instruments (own credit 1.6 Consolidated and separate financial requirements) 219 statements 32 6.9 Classification and Measurement of 1.7 Business combinations 38 Share-based Payment Transactions 1.8 Foreign currency translation and (Amendments to IFRS 2) 221 hyperinflation 43 6.10 IFRS 16 Leases 222 1.9 Accounting policies, errors and estimates 44 1.10 Events after the reporting period 46 Appendix 226 2 Statement of financial position 48 New standards or amendments for 2016 and 2.1 Property, plant and equipment 48 forthcoming requirements 226 2.2 Intangible assets and goodwill 49 2.3 Investment property 51 Keeping in touch 228 2.4 Associates and joint arrangements 53 2.5 Financial instruments 56 2.6 Inventories 72 2.7 Biological assets 72 2.8 Impairment of non-financial assets 74 2.9 Equity 78 2.10 Provisions 79 2.11 Income taxes 80 2.12 Contingent assets and liabilities 82 3 Statement of profit or loss and OCI 84 3.1 Revenue 84 3.2 Government grants 84 3.3 Employee benefits 85 3.4 Share-based payments 90 3.5 Borrowing costs 93 4 Special topics 94 4.1 Leases 94 4.2 Service concession arrangements 96 4.3 Operating segments 97 4.4 Earnings per share 101 4.5 Non-current assets held for sale or held for distribution 103 4.6 Related party disclosures 104 4.7 Investment entities 111 4.8 Insurance contracts 113 4.9 Extractive activities 117 4.10 Common control transactions and Newco formations 118 5 First-time adoption of IFRS 119 5.1 First-time adoption of IFRS 119 5.2 Regulatory deferral accounts and first-time adoption of IFRS 121 About this guide This guide has been produced by the KPMG International Standards Group (part of KPMG IFRG Limited) and the views expressed herein are those of the KPMG International Standards Group. It is intended to help preparers in the preparation and presentation of financial statements in accordance with IFRS by identifying the potential disclosures required. In addition, it includes the minimum disclosures required in the financial statements of a first-time adopter of IFRS. Standards covered This guide is based on standards and interpretations that have been issued by the IASB as at 15 August 2016 and that are required to be applied by an entity with an annual reporting period beginning on 1 January 2016 (‘currently effective requirements’). Section 6 identifies disclosure requirements based on standards that are effective for annual reporting periods beginning after 1 January 2016 (‘forthcoming requirements’) and that are available for voluntary early adoption. This guide contains disclosures only. It does not specify the scope of individual standards referred to or their recognition and measurement requirements, or explain the terms that are used in IFRS and contained in this guide. Nor does it cover IAS 26 Accounting and Reporting by Retirement Benefit Plans or IAS 34 Interim Financial Reporting. The disclosures required by IAS 34 are set out in our Guide to condensed interim financial statements – Disclosure checklist. In addition, IFRS and its interpretation change over time. Accordingly, this guide should not be used as a substitute for referring to the standards and other relevant interpretative guidance. Preparers should also consider applicable local legal and regulatory requirements. This guide does not consider the requirements of any particular jurisdiction – e.g. IFRS does not require the presentation of separate financial statements for the parent entity. Consequently, this guide includes only consolidated financial statements. What’s new in 2016? The appendix to this guide provides a comprehensive list of new requirements, distinguishing between those that are effective for an entity with an annual reporting period beginning on 1 January 2016, and those with a later effective date. As a result of these new requirements, this guide includes updated disclosures in respect of acquisitions of interests in joint operations, presentation of financial statements, regulatory deferral accounts and bearer plants. Need for judgement This guide is part of our suite of publications – Guides to financial statements – and specifically focuses on compliance with IFRS. The preparation and presentation of financial statements require the preparer to exercise judgement, in terms of the choice of accounting policies, the ordering of notes to the financial statements, how the disclosures should be tailored to reflect the reporting entity’s specific circumstances, and the relevance of disclosures considering the needs of users. Materiality Specific guidance on materiality and its application to the financial statements is included in paragraphs 29–31 of IAS 1 Presentation of Financial Statements. Materiality is relevant to the presentation and disclosure of the items in the financial statements. Preparers need to consider whether the financial statements include all of the information that is relevant to understanding an entity’s financial position on the reporting date and its financial performance during the reporting period. Copyright © IFRS Foundation. All rights reserved. Reproduced by KPMG IFRG Limited with the permission of the IFRS Foundation®. Reproduction and use rights are strictly limited. No permission granted to third parties to reproduce or distribute. 2 | Guide to annual financial statements – Disclosure checklist Preparers also need to take care not to reduce the understandability of an entity’s financial statements by obscuring material information with immaterial information or by aggregating material information that is different by nature or function. Individual disclosures that are not material to the financial statements do not have to be presented – even if they are a minimum requirement of a standard. Preparers need to consider the appropriate level of disclosure based on materiality for the reporting period. Organisation of the This guide is arranged by topic. It is designed to provide all of the IFRS disclosures that may be required for a set of annual financial statements when completed in its text entirety. Disclosures that relate to more than one topic may not always be repeated under each relevant topic. For example, the requirement to disclose accounting policies adopted for the recognition of revenue is included in Chapter 1.4 ‘Basis of accounting’, but not repeated in Chapter 3.1 ‘Revenue’. Copyright © IFRS Foundation. All rights reserved. Reproduced by KPMG IFRG Limited with the permission of the IFRS Foundation®. Reproduction and use rights are strictly limited. No permission granted to third parties to reproduce or distribute. References and abbreviations | 3 References and abbreviations References are included in the left-hand margin of this guide to identify any relevant paragraphs of the standards or our publication Insights into IFRS. IAS 1.51 Paragraph 51 of IAS 1. Insights 4.1.190.10 Paragraph 4.1.190.10 of the 13th edition 2016/17 of our publication Insights into IFRS. Major change since the 2015 edition of this guide. The following abbreviations are used often in this guide. NCI Non-controlling interests OCI Other comprehensive income Copyright © IFRS Foundation. All rights reserved. Reproduced by KPMG IFRG Limited with the permission of the IFRS Foundation®. Reproduction and use rights are strictly limited. No permission granted to third parties to reproduce or distribute. 4 | Guide to annual financial statements – Disclosure checklist The checklist 1 General presentation 1.1 Presentation of financial statements Transitional requirement for Disclosure Initiative (Amendments to IAS 1) IAS 1.139P When the amendments are first applied, the entity need not disclose the information required by IAS 8.28–30 in relation to the amendments. Fair presentation IAS 1.15 Present fairly the financial position, financial performance and cash flows of the entity in the financial statements. Fair presentation requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the Conceptual Framework for Financial Reporting (Framework). The application of IFRS, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. Financial statements not prepared on a going concern basis IAS 1.25 When the financial statements are not prepared on a going concern basis, disclose: a. the fact that the financial statements are not prepared on a going concern basis; b. the basis on which the financial statements are prepared; and c. the reason why the entity is not regarded as a going concern. Insights 1.2.75.10 An entity discloses material uncertainties related to events or conditions that may cast significant doubt on its ability to continue as a going concern. In addition to the disclosure of material uncertainties, disclosures are required when management concludes that there are no material uncertainties but reaching that conclusion involved significant judgement (a ‘close call’ scenario). Insights 1.2.70.20 In our view, there is no general dispensation from the measurement, recognition and disclosure requirements of IFRS even if an entity is not expected to continue as a going concern.
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