IFRS

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A practical guide guide to IFRS IFRS 13 disclosures What has changed? December 2013

About this guide 



This guide shows the additional disclosure requirements as a consequence of IFRS 13 Fair Value Measurement. IFRS 13 requires fair value disclosure for both financial and non-financial items regardless of whether those items are measured at fair value on a recurring or non-recurring basis. A number of standards already set out disclosure requirements for fair value m easurement. This guide is divided by those existing requirements in eac h standard showing w here IFRS 13 has enhanced or changed the fair value disclosure requirements. It does not include all disclosure requirements in individual sta ndards. IFRS 13 is effective for annual periods beginning on or after 1 January 2013. The disclosure re quirements of the standard are s et out in paragraphs 91 to 99 of the standard and are detailed in this guide.

PwC Contents 

Contents Scope

1

Overview

2

IFRS 5: Non-current assets held for sale and discontinued operations

4

IFRS 7: Financial instruments – disclosures

7

IAS 16: Property, plant and equipment

14

IAS 38: Intangible assets

20

IAS 40: Investment property

23

IAS 41: Agriculture

29

PwC Contents 

A practical guide to to IFRS 13 disclosures disclosures

Scope IFRS 13 applies where another IFRS requires or permits fair value measurement or disclosures. It has led to increased fair val ue disclosure over and above that previously included in other applicable IFRSs. However, items in the scope of the following standards r equire no IFRS 13 disclosures: 

IFRS 2, ‘Share ‘Share based payments’ payments ’



IAS 17, ‘Leases’ Leases’



IAS 36, ‘Impairment of assets’ assets ’



IAS 19, ‘Employee benefits’ benefits ’



IAS 26 Accounting and Reporting by Ret irement Benefit Plans

IFRS 3 The disclosure requirements of IFRS 13 do not apply to the fair values determined for acquisition accounting under IFRS 3. The disclosures only apply to assets and liabilities carried at fair value in the balance sheet after initial recognition. Contingent consideration is measured at fair value initially and subsequently and therefore will require additional disclosure under IFRS 13. Generally contingent consideration is measured in accordance with IAS39 or IFRS 9 and, therefore, IFRS 7 disclosure requirements will apply which are detailed later in this guide.

What has changed?

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Overview The table shows an overview of where IFRS 13 has included new requirements, incremental changes, where no change is expected or where the IFRS 13 paragraph is not applicable. Key

IFRS 13 Para

No change from current standard

IFRS 13 and standard comparable comparable with certain incremental requirements for IFRS 13

New requirement or significant changes

IFRS 5

IFRS 7

IAS 16

IAS 38

IAS 40

IAS 41

Non-current assets held for sale and discontinued operations

Financial instruments: disclosures

Property, plant and equipment

Intangible assets

Investment property

Agriculture

N/A

N/A

N/A

91 92 93a 93b 93c

N/A

93d

N/A

93e

N/A

N/A

93f

N/A

N/A

93g 93h (i)

N/A N/A

93h (ii)

What has changed?

N/A N/A

N/A

N/A

N/A

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IFRS 13 Para

IFRS 5

IFRS 7

IAS 16

IAS 38

IAS 40

IAS 41

Non-current assets held for sale and discontinued operations

Financial instruments: disclosures

Property, plant and equipment

Intangible assets

Investment property

Agriculture

93i

N/A

94

largely N/A

95

N/A

N/A

96

N/A

N/A

N/A

97

N/A

N/A

N/A

98

N/A

N/A

N/A

N/A

N/A N/A

N/A

N/A

99

What has changed?

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IFRS 5: Non-current assets held for sale and discontinued operations IFRS 5 requires non-current assets held for sale to be measured at the lower of its carrying amount and fair value less costs to sell. This is a non-recurring measurement and as such the following table only includes the IFRS 13 disclosures in respect of nonrecurring fair value measurements. IFRS 5 has no disclosure requirements specific to fair value and therefore the issuance of IFRS 13 will lead to additional disclosures. These are broadly: 



The level of the fair value hierarchy A description of the valuation technique used including any changes in technique.

Key

Para

No change from current standard

IFRS 13 and standard comparable comparable with certain incremental requirements for IFRS 13


Requ rement rement

Overv ew of d fference

An entity shall disclose information that helps users of its financial statements assess assess both of the following:

Fair value less cost to sell in IFRS 5 is non-recurring therefore only paragraph 91a is applicable. The requirement is not included in IFRS 5.

IFRS text for compar son

IFRS 13 91

92

a.

For assets and liabilities that are measured at fair value on a recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements.

b.

For recurring fair value measurements using significant unobservable inputs ( Level 3), the effect of the measurements on profit or loss or other comprehensive income for the period.

To meet the objectives in paragraph 91, an entity shall consider all the following: a.

The level of detail necessary to satisfy the disclosure requirements;

b.

How much emphasis to place on each of the various requirements;

c.

How much aggregation or disaggregation to undertake; and

d.

Whether users of financial statements statements need additional information to evaluate the quantitative quantitative information disclosed.

What has changed?

This requirement is an extension of paragraph 91. It is not included in IFRS 5 and is more detailed than the principles established in IAS 1 paragraph 15.

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A practical guide to to IFRS 13 disclosures

Para

Requirement

Overview of difference

IFRS text for comparison

IFRS 13 If the disclosures provided in accordance with this IFRS and other IFRSs are insufficient to meet the objectives in paragraph 91, an entity shall disclose additional information necessary to meet those objectives. 93

93

To meet the objectives in paragraph 91, an entity shall disclose, at a minimum, the following information for each class of assets and liabilities (see paragraph 94 for information on determining appropriate classes of assets and liabilities) measured at fair value (including measurements measurements based on fair value within the scope of this IFRS) in the statement of financial position after initial recognition:

See detailed comments below:

a.

For recurring and non-recurring fair value measurements, the fair value measurement at the end of the reporting period, and for non-recurring fair value measurements, the reasons for the measurement. Recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position at the end of each reporting period. Non-recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position in particular circumstances circumstances (e.g. when an entity measures an asset held for sale at fair value less costs to sell in accordance with IFRS 5 Non-current Non- current Assets Held for Sale and Discontinued Operations because the asset’s fair value less costs to sell is lower than its carrying amount)

IFRS 5 requires the measurement of fair value less costs to sell therefore we do not foresee significant additional disclosures in this area.

b.

For recurring and non-recurring fair value measurements, the level of the fair value hierarchy within which the fair value measurements are categorised in their entirety (Level 1, 2 or 3).

New requirement.

d.

For recurring and non-recurring fair value measurements categorised categorised within Level 2 and Level 3 of the fair value hierarchy, a description description of the valuation technique(s) and the inputs used in in the fair value measurement. If there has been a change in valuation technique (e.g. changing from a market approach to an income approach or the use of an additional valuation technique), the entity shall disclose that change and the reason(s) for making it. For fair value measurements categorised within Level 3 of the fair value hierarchy, an entity shall provide quantitative information about the significant unobservable inputs used in the fair value measurement. An entity is not required to create quantitative information to comply with this disclosure requirement if quantitative unobservable inputs are not developed by the entity when measuring fair value (e.g. when an entity uses prices from prior transactions or third-party pricing information without adjustment). However, when providing this disclosure an entity cannot ignore quantitative unobservable inputs that are significant to the fair value measurement and are reasonably available to the entity.

New requirement.

g.

For recurring and non-recurring fair value measurements categorised categorised within Level 3 of the fair value hierarchy, a description of the valuation processes used by the entity (including, for example, how an entity decides its valuation policies and procedures and analyses changes in fair value measurements from period to period).

New requirement

i.

For recurring and non- recurring fair value measurements, if the highest and best use of a non -financial asset differs from its current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use.

New requirement

What has changed?

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Para

Requirement


An entity shall determine appropriate appropriate classes of assets and liabilities liabilities on the basis of the following:

New requirement


IFRS 13 94

a.

The nature, characteristics and risks of the asset or liability; and

b.

The level of the fair value hierarchy within which the fair value measurement is categorised. categorised.

The number of classes may need to be greater for fair value measurements categorised categorised within Level 3 of the fair value hierarchy because those measurements measurements have a greater degree degree of uncertainty and subjectivity. Determining Determining appropriate classes of assets and liabilities for which disclosures about fair v alue measurements should be provided requires judgement. A class of assets and liabilities will often require greater disaggregation than the line items presented in the statement of financial position. However, an entity shall provide information sufficient to permit reconciliation to the line items presented in the statement of financial position. If another IFRS specifies the class for an asset or a liability, an entity may use that class in providing the disclosures required in this IFRS if that class meets the requirements in this paragraph. 99

An entity shall present the quantitative disclosures disclosures required by this IFRS IFRS in a tabular format unless another format is more appropriate.

What has changed?

Not specified in IFRS 5, however as only limited additional requirements are needed a table may not be necessary.

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IFRS 7: Financial instruments – disclosures The fair value disclosure requirements for financial instruments come from both IFRS 7 and IFRS 13. For entities that produced IAS 34 compliant interim accounts, the majority of the fair value disclosures as applicable for their year-end were required for financial instruments only, apart from the requirements of paragraph 97 of IFRS 13. Paragraph 97 is a notable and incremental disclosure requirement for financial instruments even for ent ities which have already provided certain fair value disclosures in accordance with IAS 34. IFRS 13 replaces several of the IFRS 7 disclosure requirements although some IFRS 7 disclosures remain and these are listed at the bottom of the table for reference. The table highlights the cha nges in fair value disclosures for financial instruments on application of IFRS 13 as compared with IFRS 7 as applied in prior years. The IFRS 13 disclosures are required prospectively, but as they replace some of the existing IFRS 7 disclosures we believe the comparative IFRS 7 disclosures should continue to be reported. Paragraph 93i is not applicable to financial instruments and is therefore excluded from the table below. The fair value disclosures required broadly cover the following areas: 





A table of fair values and carrying amounts for all financial instruments For financial instruments at fair value: −

Enhanced qualitative disclosures on valuation techniques

−

Fair value hierarchy analysis analysing fair values into levels 1, 2 and 3, a reconciliation for level 3 items and a sensitivity analysis for level 3 items

−

More narrative and quantitative information for significant unobservable inputs of level 3 items.

For financial instruments not at fair value but for which fair value is disclosed, the level in the fair value h ierarchy and disclosure on valuat ion techniques

What has changed?

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Key

Para

No change from IFRS 7

IFRS 13 and IFRS 7 comparable with certain incremental requirements for IFRS 13


Requ rement rement



An entity shall disclose information that helps users of its financial statements assess assess both of the following:

Compares with paragraph 27 of IFRS 7. 91b compares with the requirements of IFRS 7 paragraph 27B (c)

See the detailed comparisons below.

IFRS 13 91

a.

b.

92

For assets and liabilities that are measured at fair value on a recurring or nonrecurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used used to develop those measurements.


For recurring fair value measurements using significant unobservable inputs ( Level 3), the effect of the measurements on profit or loss or other comprehensive income for the period.



b.

How much emphasis to place on each of the various requirements;

c.

How much aggregation or disaggregation to undertake; and

d.

Whether users of financial statements statements need additional information to evaluate the quantitative information disclosed.

This requirement is not included in IFRS 7 but is a principal established in in IAS 1 paragraph 15. We would not expect this paragraph alone to significantly affect disclosures made.

If the disclosures provided in accordance with this IFRS and other IFRSs are insufficient to meet the objectives in paragraph 91, an entity shall disclose additional information necessary to meet those objectives. 93

To meet the objectives in paragraph 91, an entity shall disclose, at a minimum, the following information for each class of assets and liabilities (see paragraph 94 for information on determining appropriate classes of assets and l iabilities) measured at fair value (including measurements based based on fair value within the scope of this IFRS) in the statement of financial position after initial recognition:

See detail below:


a.

This paragraph was previously addressed by IFRS 7 paragraph 25 (see below) and 27B (a) (see right)

27B For fair value measurements recognised in the statement of financial position an entity shall disclose for each class of financial instruments:

What has changed?

For recurring and non-recurring fair value measurements, the fair value measurement at the end of the reporting period, and for non -recurring fair value measurements, the reasons for the measurement. Recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position at the end of each reporting period. Non-recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position in particular circumstances (e.g. when an entity measures an asset held for sale at fair value less costs to sell in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations Operations because the asset’s fair value less costs to sell is lower than its carrying amount).

a.

The level in the fair value hierarchy into which the fair value measurements measurements are categorised in their entirety, segregating fair value measurements in accordance with the levels defined in paragraph 27A. 27A.

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Para

Requirement



This paragraph was previously addressed by IFRS 7 paragraph 27B (b) (see right).

27 B (b) any significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for those transfers. Transfers into each level shall be disclosed and discussed separately from transfers out of each level. For this purpose, significance shall be judged with respect respect to profit or loss, and total assets or total liabilities

IFRS 13

93

b.


c.

For assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis, the amounts of any transfers between Level 1 and Level 2 of the fair value hierarchy, the reasons for those transfers and the entity’s policy for determining when transfers between levels are deemed to have occurred (see paragraph 95). 95) . Transfers into each level shall be disclosed and discussed separately from transfers out of each level.

d.

e.

Incrementally, IFRS 13 requires disclosure of the entity's policy for determining when a transfer has occurred.

For recurring and non-recurring fair value measurements categorised within Level 2 and Level 3 of the fair value hierarchy, a description of the valuation technique(s) and the inputs used in the fair value measurement. If there has been a change in valuation technique (e.g. changing from a market approach to an income approach or the use of an additional valuation technique), the entity shall disclose that change and the reason(s) for making it. For fair value measurements categorised within Level 3 of the fair value hierarchy, an entity shall provide quantitative information about the significant unobservable inputs used in the fair value measurement. measurement . An entity is not required to create quantitative information to comply with this disclosure requirement if quantitative unobservable inputs are not developed by the entity when measuring fair value (e.g. when an entity uses prices from prior transactions or third-party pricing information without adjustment). However, when providing this disclosure an entity cannot ignore quantitative unobservable inputs that are significant to the fair value measurement and are reasonably reasonably available to the entity.

The valuation technique, assumptions and changes to the technique are the same as previously required by IFRS 7 paragraph 27.

For recurring recurring fair value measurements categorised categorised within within Level 3 of the fair value hierarchy, a reconciliation from the opening balances to the closing balances, disclosing separately changes during the period attributable to the following:

This is very similar to the previous requirement of IFRS 7 paragraph 27B (c) with two incremental disclosures required; required;

(i)

(i)

Total gains or losses for the period recognised recognised in profit or loss, and the line item(s) in profit or loss in which those gains or losses are recognised.

(ii) Total gains or losses for the period recognised recognised in other comprehensive comprehensive income, and the line item(s) in other comprehensive income in which those gains or losses are recognised. (iii) Purchases, sales, issues and settlements (each of those types of changes disclosed separately).

The disclosure regarding quantitative information on unobservable inputs for those instruments in level 3 could be compared to IFRS 7 27B (e) relating to changes in assumptions that would have significant impact. However, in many cases an unobservable input will not have been disclosed as a reasonably possible change under IFRS 7, so this new quantitative information on unobservable inputs is likely to be a significant change.

the OCI line item where where gains/losses are recognised, and

(ii) the entity's policy for determining when transfers between levels have occurred

27 An entity shall disclose for each class of financial instruments the methods and, when a valuation technique is used, the assumptions applied in determining fair values of each class of financial assets assets or financial liabilities. For example, if applicable, an entity discloses information about the assumptions relating to prepayment rates, rates of estimated credit losses, and interest rates or discount rates. If there has been a change in valuation technique, the entity shall disclose that change and the reasons for making it.

27 B (c) for fair value measurements in Level 3 of the fair value hierarchy, a reconciliation from the beginning balances to the ending balances, disclosing separately changes during the period attributable to the following: (i)

Total gains gains or losses for the period period recognised in profit or loss, and a description of where they are presented in the statement(s) of profit or loss and other comprehensive income;

(ii) Total gains or losses recognised in other comprehensive income;

What has changed?

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Para

Requirement



IFRS 13 (iv) The amounts of any transfers into or out of Level 3 of the fair value hierarchy, hierarchy, the reasons for those transfers and the entity’s policy for determining when transfers between levels are deemed to have occurred occurred (see paragraph 95). Transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3.

93

(iii) Purchases, sales, issues issues and settlements (each type of movement disclosed separately); and (iv) Transfers into or out of Level 3 (e.g. transfers attributable to changes in the observability of market data) and the reasons for those transfers. For significant transfers, transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3.

f.

For recurring recurring fair value measurements measurements categorised categorised within Level 3 of the fair fair value hierarchy, the amount of the total gains or losses for the period in (e)(i) included in profit or loss that is attributable to the change in unrealised gains or losses relating to those assets and liabilities held at the end of the reporting period, and the line item(s) in profit or loss in which those unrealised gains or losses are recognised.

This is the same requirement as previously included in IFRS 7 paragraph 27B (d).

g.

For recurring recurring and non-recurring fair fair value measurements categorised within Level 3 of the fair value hierarchy, a description of the valuation processes used by the entity (including, for example, how an entity decides its valuation policies and procedures and analyses changes in fair value measurements from period to period).

New requirement

h.

For recurring recurring fair value measurements categorised categorised within within Level 3 of the fair value hierarchy:

This is an incremental requirement to provide a narrative disclosure as well as further disclosure of interrelationships.

(i)

What has changed?

For all such measurements, a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs inputs if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement. If there are interrelationships between those inputs and other unobservable inputs used in the fair value measurement, an entity shall also provide a description of those interrelationships and of how they might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement. To comply with that disclosure requirement, the narrative description of the sensitivity to changes in unobservable inputs shall include, at a minimum, the unobservable inputs disclosed when complying with (d).

(d) the amount of total gains or l osses for the period in (c)(i) above included in profit or loss that are attributable to gains or losses relating to those assets and liabilities held at the end of the reporting period and 27B (d)a description of where those gains or losses are presented in the statement(s) of profit or loss and other comprehensive income.

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Para

Requirement



This compares with the previous requirement of IFRS 7 paragraphs 27 B (e) and (f).

27 B (e) for fair value measurements in Level 3, if changing one or more of the inputs to reasonably possible alternative assumptions would change fair value significantly, the entity shall state that fact and disclose the effect of those changes.

IFRS 13 (ii) For financial assets and financial liabilities, liabilities, if changing one or more of the unobservable inputs to reflect reasonably possible alternative assumptions would change fair value significantly, an entity shall state that fact and disclose the effect of those changes. The entity shall disclose how the effect of a change to reflect a reasonably possible alternative assumption was calculated. For that purpose, significance shall be judged with respect to profit or loss, and total assets or total liabilities, or, when changes in fair value are recognised in other comprehensive income, total equity.

94

An entity shall determine appropriate appropriate classes of assets and liabilities liabilities on the basis of the following: a.


b.

The level of the fair value hierarchy within which the fair fair value measurement is categorised.

The number of classes may need to be greater for fair value measurements categorised within Level 3 of the fair value hierarchy hierarchy because those measurements have a greater greater degree of uncertainty and subjectivity. Determining appropriate classes of assets and liabilities for which disclosures about fair value measurements should be provided requires judgement. A class of assets and and liabilities will often require greater greater disaggregation than the line items presented in the statement of financial position. However, an entity shall provide information sufficient to permit reconciliation to the line items presented in the statement of financial position. If position. If another IFRS specifies the class for an asset or a liability, an entity may use that class in providing the disclosures required in this IFRS if that class meets the requirements in this paragraph. 95

An entity shall disclose and consistently follow its policy for determining determining when transfers between levels of the fair value hierarchy hierarchy are deemed to have occurred in accordance accordance with paragraph 93(c) and (e)(iv). The policy about the timing of recognising transfers shall be the same for transfers into the levels as for transfers out of the levels. Examples of policies for determining the timing of transfers include the following: a.

While IFRS 7 paragraph 25 required required disclosure of fair value by class of financial instrument in a way that means it can be compared with their carrying amounts, paragraph 94 of IFRS 13 goes further to state each level in the hierarchy would be a class and that greater disaggregation than that disclosed on the face of the BS would often be required. Also, that level 3 should be disaggregated.

New requirement

The date of the event or change in circumstances that caused the transfer.

b.

The beginning of the reporting period.

c.

The end of the reporting period.

What has changed?

(f) The entity shall disclose how the effect of a change to a reasonably possible alternative assumption was calculated. For this purpose, significance shall be judged with respect to profit or loss, and total assets or total liabilities, or, when changes in fair value are recognised in other comprehensive income, total equity.

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Para

Requirement



If an entity makes an accounting policy decision to use the exception in paragraph 48, it shall disclose that fact.

New requirement

IFRS 13 paragraph for reference;

97

For each class of assets and liabilities not measured at fair value in the statement of financial position but for which the fair value is disclosed, an entity shall disclose the information required by paragraph paragraph 93( b), (d) and (i). However, an entity is not required to provide the quantitative disclosures about significant unobservable inputs used in fair value measurements categorised categorised within Level 3 of the fair value hierarchy hierarchy required by paragraph 93(d). 93( d). For such assets and liabilities, an entity does not need to provide the other disclosures required by this IFRS.

New requirement

98

For a liability measured at fair value and issued with an inseparable third-party credit enhancement, an issuer shall disclose the existence of that credit enhancement and whether it is reflected in in the fair value measurement of the liability.

New requirement

99


Same as IFRS 7

IFRS 13 96

What has changed?

48 An entity that holds a group of financial assets and financial liabilities is exposed to market risks (as defined in IFRS 7) and to the credit risk (as defined in IFRS 7) of each of the counterparties. If the entity manages that group of financial assets and financial liabilities on the basis of its net exposure to either market risks or credit risk, the entity is permitted to apply an exception to this IFRS for measuring fair value. That exception permits an entity to measure the fair value of a group of financial assets and financial liabilities on the basis of the price that would be received to sell a net long position (i.e. an asset) for a particular risk exposure or to transfer a net short position (i.e. a liability) for a particular risk exposure in an orderly transaction between market participants at the measurement date under current market conditions. Accordingly, an entity shall measure the fair value of the group of financial assets and financial liabilities consistently with how market participants would price the net risk exposure exposure at the measurement date.

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IFRS 7 disclosure disclosure requirements requirements 25

Except as set out in paragraph 29, for each class of financial assets and financial liabilities (see paragraph 6), an entity shall disclose the fair value of that class of assets and liabilities in a way that permits it to be compared with its carrying amount.

26

In disclosing fair values, an entity shall group financial assets and financial liabilities into classes, but shall offset them onl y to the extent that their carrying amounts are offset in the statement of financial position.

28

If the market for a financial instrument is not active, an entity establishes its fair value using a valuation technique (see paragraphs AG74– AG74 – AG79 of IAS 39). Nevertheless, the best evidence of fair value at initial recognition is the transaction price (i.e. the fair value of the consideration given or received), unless conditions described in paragraph AG76 of IAS 39 are met. It follows that there could be a difference between the fair value at initial recognition and the amount that would be determined at that date using the valuation technique. If such a difference exists, an entity shall disclose, by class of financial instrument:

29

30

a.

Its accounting policy for recognising recognising that difference in profit or loss to reflect a change change in factors (including time) that market participants participants would consider in setting a price price (see paragraph paragraph AG76A of IAS 39); and

b.

The aggregate difference yet yet to be recognised in profit or loss at the beginning and end of the period and a reconciliation of changes in the balance of this difference. difference.

Disclosures of fair value are not required: a.

When the carrying amount amount is a reasonable approximation approximation of fair fair value, for example, example, for financial instruments instruments such as short-term trade receivables and payables;

b.

For an investment in equity instruments that do not have a quoted market market price in an active market, or derivatives derivatives linked to such equity instruments, instruments, that is measured at cost in accordance accordance with IAS 39 because its fair value cannot be measured reliably; or

c.

For a contract containing containing a discretionary discretionary participation feature feature (as described described in IFRS 4) if the fair value of that feature cannot be measured measured reliably.

In the cases described in paragraph 29(b) and (c), an entity shall disclose information to help users of the finan cial statements make their own judgements about the extent of possible differences between the carrying amount of those financial assets assets or financial liabilities and their fair fair value, including: a.

The fact that fair fair value information has not been disclosed for these instruments because because their fair value cannot be measured measured reliably;

b.

A description of the financial instruments, instruments, their carrying amount, and and an explanation of why fair value cannot be measured reliably; reliably;

c.

Information about the market for the instruments;

d.

Information about whether whether and how the entity intends to dispose of the financial financial instruments; and

e.

If financial instruments whose fair value value previously could not be reliably measured are derecognised, derecognised, that fact, their carrying carrying amount at the time of derecognition, and the amount of gain or loss recognised.

What has changed?

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IAS 16: Property, plant plant and equipment IAS 16 allows a policy choic e of using a cost or fair value model for the subsequent measurement of property, plant and equipment. IAS 1 6 contained specific fair value disclosures. Para 77 (c) of IAS 16 has now been deleted as a c onsequence of IFRS 13 to avoid any duplication. IFRS 13 requires some enhanced disclosures broadly in the following areas: 





The level of the fair value hierarchy (including any transfers between levels) Additional detailed required for level 3 Determination of classes by nature and by level in hierarchy

This table only includes relevant disclosure paragraphs of IFRS 13; paragraphs 93 (h) (ii), 96, 97 and 98 are not applicable to property, plant and equipment. Paragraph 93 (c) regarding transfers between levels 1 and 2 is not relevant as property, plant and equipment cannot be categorised as l evel 1. Key

Para

No change from IAS 16

IFRS 13 and IAS 16 comparable with certain incremental requirements for IFRS 13


Requirement



An entity shall disclose information that helps users of its financial statements assess both of the following:

a.

Compares with paragraph paragraph 77 (c) of IAS IAS 16 (now deleted as an amendment for IFRS 13).

a.

For assets and liabilities that are measured at fair value on on a recurring recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements.

b.

Compares with the requirements requirements of IAS 16 paragraph 73 (e)(iv) and paragraph 77 (f). The level 3 disaggregation is a new requirement.

b.

For recurring fair value measurements measurements using significant unobservable unobservable inputs (Level 3), the effect of the measurements on profit or loss or other comprehensive income for the period.


IAS 16 73 The financial statements shall disclose, for each class of property, plant and equipment: e. (iv) Increases or decreases resulting from revaluations under paragraphs 31, 39 and 40. 77 If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed: c. The methods and significant assumptions applied in estimating estimating the items’ fair values; f. The revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders.

IFRS 13 91

What has changed?

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Para

Requirement


To meet the objectives in paragraph 91, an entity shall consider all the following:

This requirement is an extension of paragraph 91. It is not included in IAS 16 and is more detailed than the principles established in IAS 1 paragraph 15.


IFRS 13 92

a.

The level of detail necessary to satisfy the disclosure requirements; requirements;

b.

How much emphasis to place on each each of the various requirements;

c.

How much much aggregation aggregation or disaggregation disaggregation to undertake; undertake; and

d.

whether users users of financial statements statements need additional information information to evaluate the quantitative information disclosed.

If the disclosures provided in accordance with this IFRS and other IFRSs are insufficient to meet the objectives in paragraph 91, an entity shall disclose additional information necessary to meet those ob jectives. 93

To meet the objectives in paragraph 91, an entity shall disclose, at a minimum, the following information for each class of assets and liabilities (see paragraph 94 for information on determining appropriate classes of assets and liabilities) measured at fair value (including measurements based on fair value within the scope of this IFRS) in the statement of financial position after initial recognition:

See detail below:


a.

For recurring and non-recurring fair value measurements, the fair value measurement at the end of the reporting period, and for non-recurring fair value measurements, the reasons reasons for the measurement. Recurring fair fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position at the end of each reporting period. Non-recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position in particular circumstances (e.g. when an entity measures an asset held for sale at fair value less costs to sell in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations because the asset’s fair value less costs to sell is lower than its carrying amount).

IAS 16 paragraph 29 requires consideration of the use of fair value as an accounting policy choice therefore we do not foresee significant additional disclosures in this area.

IAS 16

For recurring and non-recurring fair value measurements, the level of the fair value hierarchy within which the fair value measurements are categorised in their entirety (Level 1, 2 or 3). 3) .

New requirement.

b.

What has changed?

29 An entity shall choose either the cost model in paragraph 30 or the revaluation model in paragraph 31 as its accounting policy and shall apply that policy to an entire class of property, plant and equipment.

PwC 15 


Para

Requirement



d.

For recurring and non-recurring fair value measurements categorised categorised within Level 2 and Level 3 of the fair value hierarchy, a description of the valuation technique(s) and the inputs used in the fair value measurement. If there has been a change in valuation technique (e.g. changing from a market approach approach to an income approach or the use of an additional valuation technique), the entity shall disclose that change and the reason(s) for making it. For fair value measurements categorised categorised within Level 3 of the fair value hierarchy, an entity shall provide quantitative information about the significant unobservable inputs used in the fair value measurement. An measurement. An entity is not required to create quantitative information to comply with this disclosure requirement if quantitative unobservable inputs are not developed by the entity when measuring fair value (e.g. when an entity uses prices from prior transactions or third-party pricing in formation without adjustment). However, when providing this disclosure an entity cannot ignore quantitative unobservable inputs that are significant to the fair value measurement and are reasonably available to the entity.

Comparable to IAS 16 paragraph 77 (c) but IFRS 13 is more specific regarding quantitative disclosure disclo sure of ‘significant unobservable inputs’. Change in valuation technique and reasons for that change are new requirements.

IAS 16

For recurring fair value measurements categorised within Level 3 of the fair value hierarchy, a reconciliation reconciliation from the opening balances to the closing balances, disclosing separately separately changes during the period attributable attributable to the following:

IAS 16 paragraphs 39 and 40 set out the requirements for recognition in other comprehensive income and profit or loss. The reconciliation required by IFRS 13 is therefore similar to the IAS 16 disclosure requirements in paragraph 73 (e) but more detail is required relating to line items.

IFRS 13

e.

(i)


(ii) Total gains or losses for the period recognised recognised in other comprehensive comprehensive income, and the line item(s) in other comprehensive income in which those gains or lo sses are recognised. (iii) Purchases, sales, issues and settlements (each of those types of changes disclosed separately). (iv) The amounts of any transfers into or out o f Level 3 of the fair value hierarchy, the reasons for those transfers and the entity’s policy for determining when transfers between levels are deemed to have occurred (see paragraph 95). Transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3.

What has changed?

Level 3 transfer disclosures are a new requirement.

77 If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed: a.

The effective date of the revaluation;

b.

Whether an independent valuer was involved;

c.

The methods and significant assumptions applied in estimating the items’ fair values;

d

The extent to which the items’ fair values were determined directly 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.

IAS 16 73 The financial statements shall disclose, for each class of property, plant and equipment: e.

A reconciliation of the carrying amount amount at the beginning and end of the period showing: i.

additions;

ii.

assets classified as held for sale or included in a disposal group classified as held for sale in accordance with IFRS 5 and other disposals;

iii. acquisitions through business combinations; iv.

increases or decreases resulting from revaluations under paragraphs 31, 39 and 40 and from impairment losses recognised or reversed in other comprehensive income in accordance with IAS 36;

v.

impairment losses recognised in profit or loss in accordance with IAS 36;

vi.

impairment losses reversed in profit or

PwC 16 


Para

Requirement



IFRS 13 loss in accordance with 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 exchange operation into the presentation currency of the reporting entity; and ix.

other changes.

77 If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed: f.

f.

For recurring fair value measurements categorised within Level 3 of the fair value hierarchy, the amount of the total gains or losses for the period period in (e)(i) included in profit or loss that is attributable to the change in unrealised gains or losses relating to those assets and liabilities held at the end of the reporting period, and the line item(s) in profit or lo ss in which those unrealised gains or losses are recognised.

As for IFRS 13 paragraph 93e above.

g.

For recurring and non-recurring fair value measurements categorised within Level 3 of the fair value hierarchy, a description of the valuation processes used by the entity (including, for example, how an entity decides its valuation policies and procedures procedures and analyses changes in fair value measurements from period to period).

Although not as specific, similar disclosures disclosures are required by IAS 16 paragraph 77d.

What has changed?

The revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders.

77 If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed: d. 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.

PwC 17 


Para

Requirement


h.

This is an incremental requirement to provide a narrative disclosure as well as further disclosure of interrelationships, although IAS 1 already has a requirement for significant judgements and estimates to be disclosed.


IFRS 13 For recurring fair value measurements categorised within Level 3 of the fair value hierarchy: (i)

i.

94

For all such measurements, a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement. If there are interrelationships between those inputs and other unobservable inputs used in the fair value measurement, an entity shall also provide a description of those interrelationships and of how they might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement. To comply with that disclosure disclosure requirement, the narrative description of the sensitivity to changes in unobservable inputs shall include, at a minimum, the unobservable inputs disclosed when complying with (d).

For recurring and non- recurring fair value measurements, if the highest and best use of a non-financial asset differs from from its current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use.

An entity shall determine appropriate appropriate classes of assets and liabilities liabilities on the basis of the following: a.


b.


The number of classes may need to be greater for fair value measurements categorised within Level 3 of the fair value hierarchy because those measurements have a greater degree of un certainty and subjectivity. Determining appropriate classes of assets and liabilities for which disclosures about fair v alue measurements should be provided requires judgement. A class of assets and liabilities will often require greater disaggregation than the line items presented in the statement of financial position. However, an entity shall provide information sufficient to permit reconciliation to the line items presented in the statement of financial position. If another IFRS specifies the class for an asset or a liability, an entity may use that class in providing the disclosures required in this IFRS if that class meets the requirements in this paragraph.

What has changed?

New requirement

IAS 16 requires disclosure of revalued amounts by class of PP&E but classes are determined based on similar nature and use of the asset in an entity’s operations; IAS 16 does not require determination of classes on the basis of fair value measurements.

IAS 16

a.

The measurement bases used for determining the gross carrying amount;

Paragraph 94 of IFRS 13 goes further to state each level in the hierarchy would be a class and that greater disaggregation than that disclosed on the face of the BS would often be required. It also requires that Level 3 should be disaggregated.

d.

The gross gross carrying amount at at the beginning and end of the period

73 The financial statements shall disclose, for each class of property, plant and equipment:

37 A class of property, plant and equipment is a grouping of assets of a similar nature and use in an entity’s operations. 38 The items within a class of property, plant and equipment are revalued simultaneously to avoid selective revaluation of assets and the reporting of amounts in the financial statements that are a mixture of costs and values as at different dates. However, a class of assets may be revalued on a rolling basis provided revaluation of the class of assets is completed within a short period and provided the revaluations are up to date.

PwC 18 


Para

Requirement


An entity shall disclose and consistently follow its policy for determining determining when transfers between levels of the fair value hierarchy are deemed to have occurred in accordance with paragraph 93(c) and (e)(iv). The policy about the timing of recognising transfers shall be the same for transfers into the levels as for transfers out of the levels. Examples of policies for determining the timing of transfers include the following:

New requirement


IFRS 13 95

a.

99


b.


c.



What has changed?

Not specified in IAS 16

PwC 19 


IAS 38: Intangible assets IAS 38 allows a policy choice of using a cost or fair value model for the subsequent measurement of intangibles if the intangible is traded in an active market. Intangibles carried at fair value would therefore be categorised as level 1, and as such the enhanced disclosures of IFRS 13 regarding other fair value hierarchy levels and details for level 3 are not relevant. IAS 38 contained specific fair value disclosures. Para 124 (c) of IAS 38 has now been deleted as a consequence of IFRS 13 to avoid any dupl ication. This table only includes relevant disclosure paragraphs of IFRS 13; paragraphs 96, 97 and 98 are not applicable to intangible assets. Paragraphs 93 (c) – (h) and 95 are not relevant to intangible assets categorised as level 1 as noted above. Key

Para




Requ rement rement



An entity shall disclose information that helps users users of its financial statements assess both of the following:

a.

Compares with paragraph paragraph 124 (c) of IAS 38 (now deleted after publication of IFRS 13).

IAS 38

a.

b.

Compares with the requirements requirements of IAS 38 paragraph 124 (b).

IFRS 13 91

b.

92

For assets and liabilities that are measured at fair value on on a recurring recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements.


b.

How much emphasis to place on each each of the various requirements;

c.


What has changed?

b.

The amount of the revaluation surplus that relates to intangible assets at the beginning and end of the period, indicating the changes during the period and any restrictions on the distribution of the balance to shareholders.

c.

The methods and significant assumptions applied in estimating the items’ fair values.

For recurring fair value measurements measurements using significant unobservable unobservable inputs (Level 3), the effect of the measurements on profit or loss or other comprehensive income for the period.



124 If intangible assets are accounted for at revalued amounts, an entity shall disclose the following:

This requirement is not included in IAS 38 but is a principle established in IAS 1 paragraph 15. We would not expect this paragraph alone alone to significantly affect disclosures made.

PwC 20 


Para

Requirement




See detail below:


a.

For recurring and non-recurring fair value measurements, the fair value measurement at the end of the reporting period, and for non-recurring fair value measurements, the reasons for the measurement. measurement . Recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position at the end of each reporting period. Non-recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position in particular circumstances (e.g. when an entity measures an asset held for sale at fair value less costs to sell in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations because the asset’s fair value less costs to sell is lower than its carrying amount).

IAS 38 requires consideration of the use of fair value as an accounting policy choice therefore therefore we do not foresee significant additional disclosures in this area.

IAS 38


New requirement.

IFRS 13 d.

Whether users users of financial statements statements need additional information information to evaluate the quantitative information disclosed.

If the disclosures provided in accordance with this IFRS and other IFRSs are insufficient to meet the objectives in paragraph 91, an entity shall disclose additional information necessary to meet those objectives. 93

b.

i.

What has changed?

For recurring and non- recurring fair value measurements, if the highest and best use of a non-financial asset differs from its current current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use.

72 An entity shall choose either the cost model in paragraph 74 or the revaluation model in paragraph 75 as its accounting policy. If an intangible asset is accounted for using the revaluation model, all the other assets in its class shall also be accounted for using the same model, unless there is no active market for those assets.

New requirement

PwC 21 


Para

Requirement




IAS 38 requires disclosure of revalued amounts by class of intangible assets but classes are are determined based on similar nature and use of the asset in an entity’s operations; IAS 38 does not require determination of classes on the basis of fair value measurements.

IAS 38

IFRS 13 94

99

a.


b.


The number of classes may need to be greater for fair value measurements categorised within Level 3 of the fair value hierarchy because those measurements have a greater degree of un certainty and subjectivity. Determining appropriate classes of assets and liabilities for which disclosures about fair v alue measurements should be provided requires judgement. A class of assets and liabilities will often require greater disaggregation than the line items presented in the statement of financial position. However, an entity shall provide information sufficient to permit reconciliation to the line items presented in the statement of financial position. If another IFRS specifies the class for an asset or a liability, an entity may use that class in providing the disclosures required in this IFRS if that class meets the requirements in this paragraph.

Paragraph 94 of IFRS 13 goes further to state each level in the hierarchy would be a class and that greater disaggregation than that disclosed on the face of the BS would often be required. The requirements for level 3 are not relevant to intangible assets that can only be level 1 as noted above.



What has changed?

119 A class of intangible assets is a grouping of assets of a similar nature and use in an entity’s operations. entity’s operations. 124 If intangible assets are accounted for at revalued amounts, an entity shall disclose the following: a.

By class of intangible assets: (i)

The effective date of the revaluation;

(ii) The carrying carrying amount of of revalued intangible assets; and (iii) The carrying amount that would have been recognised had the revalued class class of intangible assets been measured after recognition using the cost model in paragraph 74.

PwC 22 


IAS 40: Investment property IAS 40 allows a policy choice of using a cost or fair value model for the subsequent measurement of investment properties. IAS 40 contained s pecific fair value disclosures. Para 75 (d) of IAS 40 has now been deleted as a consequence of IFRS 13 to avoid any duplication. IFRS 13 requires some enhanced disclosures broadly in the following areas: 





The level of the fair value hierarchy (including any transfers between levels) Additional detail required for level 3 Determination of classes by nature and by level in hierarchy

This table only includes relevant disclosure paragraphs of IFRS 13; paragraphs 93 (h) (ii), 96 and 98 are not applicable to investment properties. Paragraph 93 (c) regarding transfers between levels 1 and 2 is not relevant as investment properties cannot be cate gorised as level 1. Key

Para




Requirement




91a compares with paragraph 75 (d) of IAS 40 (now deleted as an amendment for IFRS 13).

IAS 40

a.

91b compares with the requirements of IAS 40 paragraph 76 (d).

d.

IFRS 13 91

b.

For assets and liabilities that are measured at fair value on on a recurring recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements. For recurring fair value measurements measurements using significant unobservable unobservable inputs (Level 3), the effect of the measurements on profit or loss o r other comprehensive income for the period.


75 An entity shall disclose: The methods and significant assumptions applied in determining the fair value of investment property, including a statement whether the determination of fair value was was supported by market evidence or was more heavily based on other factors (which the entity shall disclose) because of the nature of the property and lack of comparable market data.

76 In addition to the disclosures required by paragraph 75, an entity that applies the fair value model in paragraphs 33-55 shall disclose a reconciliation between the carrying amounts of investment property at the beginning and end of the period, showing the following:

What has changed?

PwC 23 


Para

Requirement



IFRS 13 d.

92



b.

How much emphasis to place on each of the various various requirements;

c.


d.


Net gains or losses from fair value adjustments;

This requirement is an extension of paragraph 91. It is not included in IAS 40 and is more detailed than the principles established in IAS 1 paragraph 15.



See detail below:


a.

For recurring recurring and non-recurring fair fair value measurements, the fair value measurement at the end of the reporting period, and for non-recurring fair value measurements, the reasons for the measurement. measurement . Recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position at the end of each reporting period. Non-recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position in particular circumstances (e.g. when an entity measures an asset held for sale at fair value less costs to sell in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations because the asset’s fair value less cost s to sell is lower than its carrying amount).

IAS 40 requires consideration of the use of fair value as an accounting policy choice therefore we do not foresee significant additional disclosures in this area.

IAS 40

For recurring and non-recurring fair fair value measurements, the level of the fair value hierarchy within which the fair value measurements are categorised in their entirety (Level 1, 2 or 3).

New requirement.

b.

What has changed?

30 With the exceptions noted in paragraphs 32A and 34, an entity shall choose as its accounting policy either the fair value model in paragraphs 33-55 or the cost model in paragraph 56 and shall apply that policy to all of its investment property.

PwC 24 


Para

Requirement



d.

For recurring recurring and non-recurring fair fair value measurements categorised within Level 2 and Level 3 of the fair value hierarchy, a description description of the valuation technique(s) and the inputs used used in the fair value measurement. If there has been a change in valuation technique (e.g. changing from a market approach to an income approach or the use of an additional valuation technique), the entity shall disclose that that change and the reason(s) for making it. For fair value measurements categorised within Level 3 of the fair value hierarchy, an entity shall provide quantitative information about the significant unobservable inputs used in the fair value measurement. An entity is not required to create quantitative information to comply with this disclosure requirement if quantitative unobservable inputs are not developed by the entity when measuring fair value (e.g. when an entity uses prices from prior transactions or third-party pricing information without adjustment). However, when providing this disclosure an entity cannot ignore quantitative unobservable inputs that are significant to the fair value measurement and are reasonably available to the entity.

Comparable to IAS 40 paragraph 75 (d) (now deleted) but IFRS 13 is more specific regarding quantitative disclosure of ‘significant unobservable inputs’. Change Chang e in valuation technique and reasons for that change are new requirements.

IAS 40

For recurring recurring fair value measurements measurements categorised categorised within Level 3 of the fair fair value hierarchy, a reconciliation reconciliation from the opening balances to the closing balances, disclosing separately separately changes during the period attributable attributable to the following:

IAS 40 paragraph 35 sets out the requirement for profit or loss recognition. The reconciliation required by IFRS 13 is therefore similar to the IAS 40 paragraph 76 but more detail is required relating to line items. IFRS 13 paragraph 93 (e) (ii) is not relevant.

IAS 40 35 A gain or loss arising from a change in the fair value of investment property shall be recognised in profit or loss for the period in which it arises. 76 In addition to the disclosures required by paragraph 75, an entity that applies the fair value model in paragraphs 33-55 shall disclose a reconciliation between the carrying amounts of investment property at the beginning and end of the period, showing the following: a. Additions, disclosing separately those additions resulting from acquisitions and those resulting from subsequent expenditure recognised in the carrying amount of an asset; b. Additions resulting from acquisitions acquisitions through business combinations; c. Assets classified as held for sale or included included in a disposal group classified as held for sale in accordance with IFRS 5 and other disposals; d. Net gains or losses from fair fair value adjustments; e. ….net exchange differences…; f. transfers to and from inventories and owneroccupied property; and g. other changes.

IFRS 13 93

e.

(i)


(ii) Total gains or losses for the period recognised recognised in other comprehensive comprehensive income, and the line item(s) in other comprehensive income in which those gains or lo sses are recognised. (iii) Purchases, sales, issues and settlements (each of those types of changes disclosed separately). (iv) The amounts of any transfers into or out o f Level 3 of the fair value hierarchy, the reasons for those transfers and the entity’s policy for determining when transfers between levels are deemed to have occurred (see paragraph 95). Transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3.

What has changed?

Level 3 transfer disclosures are a new requirement.

75 An entity shall disclose: d.

The methods and significant assumptions applied in determining the fair value of investment property, including a statement whether the determination of fair value was was supported by market evidence or was more heavily based on other factors (which the entity shall disclose) because of the nature of the property and lack of comparable market data.

PwC 25 


Para

Requirement


f.

For recurring recurring fair value measurements measurements categorised categorised within Level 3 of the fair fair value hierarchy, the amount of the total gains or losses for the period in (e)(i) included in profit or loss that is attributable to the change in unrealised gains or losses relating to those assets and liabilities held at the end of the reporting period, and the line item(s) in profit or loss in which those unrealised gains or losses are recognised.


g.

For recurring and non-recurring fair value measurements categorised within Level 3 of the fair value hierarchy, a description description of the valuation processes used by the entity (including, for example, how an entity decides its valuation policies and procedures and analyses changes in fair value measurements from period to period).

Although not as specific, similar disclosures were required by IAS 40 paragraphs paragraphs 75d (now deleted) and 75e.


IFRS 13 93

h.

For recurring recurring fair value measurements categorised categorised within within Level 3 of the fair value hierarchy: (i)

What has changed?


IAS 40 75 An entity shall disclose: d.

The methods and significant assumptions applied in determining the fair value of investment property, including a statement whether the determination of fair value was was supported by market evidence or was more heavily based on other factors (which the entity shall disclose) because of the nature of the property and lack of comparable market data.

e.

The extent to which the fair value of investment property (as measured or disclosed in the financial statements) is based on a valuation by an independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued. If there has been no such valuation, that fact shall be disclosed.

This is an incremental requirement to provide a narrative disclosure as well as further disclosure of interrelationships, although IAS 1 already has a requirement for significant judgements and estimates to be disclosed. disclosed.

PwC 26 


Para

Requirement


93

i.

New requirement

94



IFRS 13 For recurring recurring and non- recurring recurring fair value measurements, measurements, if the highest and best use of a non-financial asset differs from its current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use.

a.


b.


The number of classes may need to be greater for fair value measurements categorised within Level 3 of the fair value hierarchy because those measurements have a greater degree of un certainty and subjectivity. Determining appropriate classes of assets and liabilities for which disclosures about fair value measurements should be provided requires judgement. A class of assets and liabilities will often require greater disaggregation than the line items presented in the statement of financial position. However, an entity shall provide information sufficient to permit reconciliation to the line items presented in the statement of financial position. If another IFRS specifies the class for an asset or a liability, an entity may use that class in providing the disclosures required in this IFRS if that class meets the requirements in this paragraph. 95

An entity shall disclose and consistently follow its policy for determining determining when transfers between levels of the fair value hierarchy are deemed to have occurred in accordance with paragraph 93(c) and (e)(iv). The policy about the timing of recognising transfers shall be the same for transfers into the levels as for transfers out of the levels. Examples of policies for determining the timing of transfers include the following: a.

Paragraph 94 of IFRS 13 goes further to state each level in the hierarchy would be a class and that greater disaggregation than that disclosed on the face of the BS would often be required. It also requires that Level 3 should be disaggregated.

New requirement


b.


c.


What has changed?

New requirement. IAS 40 does not require determination of classes on the basis of fair value measurements.

PwC 27 


Para

Requirement



For each class of assets and liabilities not measured at fair value in the statement of financial position but for which the fair value is disclosed, an entity shall disclose the information required by paragraph paragraph 93( b), (d) and (i). However, an entity is not required to provide the quantitative disclosures about significant unobservable inputs used in fair value measurements categorised within Level 3 of the fair value hierarchy required by paragraph paragraph 93(d). 93( d). For such assets and liabilities, an entity does not need to provide the other disclosures required by this IFRS.

See above

IAS 40



IFRS 13 97

99

What has changed?

32 This Standard requires all en tities to determine the fair value of investment property, for the purpose of either measurement (if the entity uses the fair value model) or disclosure (if it uses the cost model).

PwC 28 


IAS 41: Agriculture IAS 41 requires all biological assets to be measured initially and subsequently at fair value less cost of disposal. IAS 41 already contained a number of fair value disclosure requirements. Paragraph 47 and 48 of IAS 41 have been deleted as a consequence of IFRS 13 to avoid any duplication. IFRS 13 requires some enhanced disclosures broadly in the following areas: 



The level of the fair value hierarchy (including any transfers between levels) Additional detail required for level 3

This table only includes relevant disclosure paragraphs of IFRS 13; paragraphs 93 (h) (ii), 96, 97 and 98 are not applicable to Agriculture. Key

Para




Requirement




a.

IAS 41

IFRS 13 91

a.

b.

For assets and liabilities that are measured at fair value on on a recurring recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements. For recurring fair value measurements measurements using significant unobservable unobservable inputs (Level 3), the effect of the measurements on profit or lo ss or other comprehensive income for the period.

b

Compares with IAS 41 paragraph 47-48. These paragraphs have been deleted since IFRS 13 has been issued. Compares to para 50(a) of IAS 41, although para 50(a) only asks for the aggregate gain or loss for all biological assets. The level 3 disaggregation is a new requirement.

47 An entity shall disclose the methods and significant assumptions applied to determining the fair value of each group of agricultural produce at the point of harvest and each group of biological asset. 48 An entity shall disclose the fair value less costs to sell of agriculture produce harvested during the period, determined at the point of harvest. 50 An entity shall present a reconciliation of changes in the carrying amount of biological assets between the beginning and the end of the current period. The reconciliation shall include: a.

What has changed?

the gain or loss arising from from changes in fair value less costs to sell.

PwC 29 


Para

Requirement


To meet the objectives in paragraph 91, an entity shall consider all the following:

This requirement is not included in IAS 41 but is a principle established in IAS 1 paragraph 15. We would not expect this paragraph paragraph alone to significantly affect disclosures made.


IFRS 13 92

a.


b.

How much emphasis to place on each of the various various requirements;

c.


d.




See detailed comments below:

a.

For recurring recurring and non-recurring fair fair value measurements, the fair value measurement at the end of the reporting period, and for non-recurring fair value measurements, the reasons reasons for the measurement. Recurring Recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position at the end of each reporting period. Non-recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement of financial position in particular circumstances (e.g. when an entity measures an asset held for sale at fair value less costs to sell in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations because the asset’s fair value less costs to sell is lower than its carrying amount)

The carrying amount (which is fair value less cost to sell) of biological assets at year end is a required disclosure of IAS 41 para 50.

b.

For recurring and non-recurring fair fair value measurements, the level of the fair value hierarchy within which the fair value measurements are categorised in their entirety (Level 1, 2 or 3).

New requirement.

c.

For assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis, the amounts of any transfers between Level 1 and Level 2 of the fair value hierarchy, the reasons reasons for those transfers and the entity’s policy fo r determining when transfers between levels are deemed to have occurred (see paragraph 95). Transfers into each level shall be disclosed and discussed separately from transfers out of each level.

New requirement.

What has changed?

IAS 41 para 50 –see below

PwC 30 


Para

Requirement



d.

For recurring recurring and non-recurring fair fair value measurements categorised within Level 2 and Level 3 of the fair value hierarchy, a description of the valuation technique(s) and the inputs used in the fair value measurement. If there has been a change in valuation technique (e.g. changing from a market market approach to an income approach or the use of an additional valuation technique), the entity shall disclose that change and the reason(s) for making it. For fair value measurements categorised categorised within Level 3 of the fair value hierarchy, hierarchy, an entity shall provide quantitative information about the significant unobservable inputs used in the fair value measurement. An measurement. An entity is not required to create quantitative information to comply with this disclosure requirement if quantitative unobservable inputs are not developed by the entity when measuring fair value (e.g. when an entity uses prices from prior transactions or third-party pricing information without adjustment). However, when providing this disclosure an entity cannot ignore quantitative unobservable inputs that are significant to the fair value measurement and are reasonably available to the entity.

Comparable to IAS 41 paragraph 47-48 (now deleted) but IFRS 13 is more specific regarding quantitative disclosure of ‘significant unobservable inputs’. Change in valuation technique and reasons for that change are new requirements.

IAS 41

For recurring fair value measurements categorised within categorised within Level 3 of the fair value hierarchy, a reconciliation reconciliation from the opening balances to the closing balances, disclosing separately separately changes during the period attributable attributable to the following:

Is comparable to para 50 of IAS 41 but more detail is required relating to line items. A reconciliation of changes in carrying amount of biological assets between the beginning and end of the current period is required by IAS 41 para 50. This includes the gain or loss arising from changes in fair values less cost to sell. However this is done for all biological assets and therefore an additional reconciliation will be needed for level 3.

IFRS 13 93

e.

(i)


(ii) Total gains or losses for the period recognised recognised in other comprehensive comprehensive income, and the line item(s) in other comprehensive income in which those gains or lo sses are recognised.

47 An entity shall disclose the methods and significant assumptions applied to determining the fair value of each group of agricultural produce at the point of harvest and each group of biological asset. 48 An entity shall disclose the fair value less costs to sell of agriculture produce harvested during the period, determined at the point of harvest.

IAS 41 50 An entity shall present a reconciliation of changes in the carrying amount of biological assets between the beginning and the end of the current period. The reconciliation shall include: a. b.

Increases due to purchases; purchases;

c.

Decreases attributable to sales and biological assets classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with IFRS 5

(iii) Purchases, sales, issues and settlements (each of those types of changes disclosed separately). (iv) The amounts of any transfers into or out o f Level 3 of the fair value hierarchy, the reasons for those transfers and the entity’s policy for determining when transfers between levels are deemed to have occurred (see paragraph 95). Transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3.

What has changed?

The gain or loss arising from changes changes in fair value less costs to sell;

d.

Decreases due to harvest;

e.

Increases resulting from business combinations;

f.

Net exchange differences arising on the translation of financial statements into a different presentation currency, and on the translation of a foreign operation into the presentation currency of the reporting entity; and

g.

Other changes.

PwC 31 


Para

Requirement


f.

For recurring recurring fair value measurements measurements categorised categorised within Level 3 of the fair value hierarchy, the amount of the total gains or losses for the period in (e)(i) included in profit or loss that is attributable to the change in unrealised gains or losses relating to those assets and liabilities held at the end of the reporting period, period , and the line item(s) in profit or loss in which those unrealised gains or losses are recognised.


g.

For recurring recurring and non-recurring fair fair value measurements categorised within Level 3 of 3 of the fair value hierarchy, a description of the valuation processes used by the entity (including, for example, how an entity decides its valuation policies and procedures procedures and analyses changes in fair value measurements from period to period).

Although not as specific, similar disclosures disclosures were required by IAS 41 paragraph paragraph 47-48 (now deleted) .


IFRS 13

93

IAS 41 47 An entity shall disclose the methods and significant assumptions applied to determining the fair value of each group of agricultural produce at the point of harvest and each group of biological asset. 48 An entity shall disclose the fair value less costs to sell of agriculture produce harvested during the period, determined at the point of harvest.

h.

For recurring recurring fair value measurements categorised categorised within within Level 3 of the fair value hierarchy: (i)

i.

What has changed?

New requirement


For recurring and non- recurring fair value measurements, if the highest and best use of a non-financial asset differs from from its current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use.

New requirement

PwC 32 


Para

Requirement




Para 43 of IAS 41 specifically requires a split between bearer and consumable or mature and immature (these can be further divided).

IAS 41

IFRS 13 94

a.


b.

The level of the fair value hierarchy within which the fair value measurement is categorised.

IFRS 13 differs as it asks for assets to be divided by their fair value hierarchy.

The number of classes may need to be greater for fair value measurements categorised within Level 3 of the fair value hierarchy because those measurements have a greater degree of un certainty and subjectivity. Determining appropriate classes of assets and liabilities for which disclosures about fair value measurements should be provided requires judgement. A class of assets and liabilities will often require greater disaggregation than the line items presented in the statement of financial position. However, an entity shall provide information sufficient to permit reconciliation to the line items presented in the statement of financial position. If another IFRS specifies the class for an asset or a liability, an entity may use that class in providing the disclosures required in this IFRS if that class meets the requirements in this paragraph. 95

An entity shall disclose and consistently follow its policy for determining determining when transfers between levels of the fair value hierarchy are deemed to have occurred in accordance with paragraph 93(c) and (e)(iv). The policy about the timing of recognising transfers shall be the same for transfers into the levels as for transfers out of the levels. Examples of policies for determining the timing of transfers include the following: a.

99

New requirement


b.


c.



What has changed?

43 An entity is encouraged to provide a quantified description of each group of biological assets, distinguishing between consumable and bearer biological assets or between mature and immature biological assets, as appropriate. appropriate. For example, an entity may disclose the carrying amounts of consumable biological assets and bearer biological assets by group. An entity may further divide those carrying amounts between mature and immature assets. These distinctions provide information that may be helpful in assessing the timing of future cash flows. An entity discloses the basis for making any such distinctions

Not specified in IAS 41 but usual practice.

PwC 33 

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2013 PricewaterhouseCoopers PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure www.pwc.com/structure for further details.

131205-104650-MF-OS

IFRS

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