Disclosure (AASB116_08-15_COMPdec21_01-22)

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

(a)            the measurement bases used for determining the gross carrying amount;

(b)            the depreciation methods used;

(c)             the useful lives or the depreciation rates used;

(d)            the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period; and

(e)             a reconciliation of the carrying 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 AASB 5 and other disposals;

(iii)           acquisitions through business combinations;

(iv)           increases or decreases resulting from revaluations under paragraphs 31, 39, Aus39.1, 40, Aus40.1 and Aus40.2 and from impairment losses recognised or reversed in other comprehensive income in accordance with AASB 136;

(v)            impairment losses recognised in profit or loss in accordance with AASB 136;

(vi)           impairment losses reversed in profit or loss in accordance with AASB 136;

(vii)          depreciation;

(viii)        the net exchange differences arising on the translation of the financial statements from the functional currency into a different presentation currency, including the translation of a foreign operation into the presentation currency of the reporting entity; and

(ix)           other changes.

The financial statements shall also disclose:

(a)            the existence and amounts of restrictions on title, and property, plant and equipment pledged as security for liabilities;

(b)            the amount of expenditures recognised in the carrying amount of an item of property, plant and equipment in the course of its construction; and

(c)             the amount of contractual commitments for the acquisition of property, plant and equipment.

If not presented separately in the statement of comprehensive income, the financial statements shall also disclose:

(a)            the amount of compensation from third parties for items of property, plant and equipment that were impaired, lost or given up that is included in profit or loss; and

(b)            the amounts of proceeds and cost included in profit or loss in accordance with paragraph 20A that relate to items produced that are not an output of the entity’s ordinary activities, and which line item(s) in the statement of comprehensive income include(s) such proceeds and cost.

Selection of the depreciation method and estimation of the useful life of assets are matters of judgement. Therefore, disclosure of the methods adopted and the estimated useful lives or depreciation rates provides users of financial statements with information that allows them to review the policies selected by management and enables comparisons to be made with other entities. For similar reasons, it is necessary to disclose:

(a)            depreciation, whether recognised in profit or loss or as a part of the cost of other assets, during a period; and

(b)            accumulated depreciation at the end of the period.

In accordance with AASB 108 an entity discloses the nature and effect of a change in an accounting estimate that has an effect in the current period or is expected to have an effect in subsequent periods. For property, plant and equipment, such disclosure may arise from changes in estimates with respect to:

(a)            residual values;

(b)            the estimated costs of dismantling, removing or restoring items of property, plant and equipment;

(c)             useful lives; and

(d)            depreciation methods.

If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed in addition to the disclosures required by AASB 13:

(a)            the effective date of the revaluation;

(b)            whether an independent valuer was involved;

(c)–(d)     [deleted]

(e)             for each revalued class of property, plant and equipment, the carrying amount that would have been recognised had the assets been carried under the cost model; and

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

Notwithstanding paragraph 77(e), in respect of not-for-profit entities, for each revalued class of property, plant and equipment, the requirement to disclose the carrying amount that would have been recognised had the assets been carried under the cost model does not apply.

In accordance with AASB 136 an entity discloses information on impaired property, plant and equipment in addition to the information required by paragraph 73(e)(iv)–(vi).

Users of financial statements may also find the following information relevant to their needs:

(a)            the carrying amount of temporarily idle property, plant and equipment;

(b)            the gross carrying amount of any fully depreciated property, plant and equipment that is still in use;

(c)             the carrying amount of property, plant and equipment retired from active use and not classified as held for sale in accordance with AASB 5; and

(d)            when the cost model is used, the fair value of property, plant and equipment when this is materially different from the carrying amount.

Therefore, entities are encouraged to disclose these amounts.