Guide to annual financial statements – Disclosure checklist

Disclosure checklist

Guide to annual financial statements IFRS?

October 2016 ifrs

Contents

About this guide

1

References and abbreviations

3

The checklist

4

1 General presentation

4

1.1 Presentation of financial statements

4

1.2 Changes in equity

17

1.3 Statement of cash flows

18

1.4 Basis of accounting

23

1.5 Fair value measurement

29

1.6 Consolidated and separate financial

statements

32

1.7 Business combinations

38

1.8 Foreign currency translation and

hyperinflation

43

1.9 Accounting policies, errors and estimates

44

1.10 Events after the reporting period

46

2 Statement of financial position

48

2.1 Property, plant and equipment

48

2.2 Intangible assets and goodwill

49

2.3 Investment property

51

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

6 Voluntary early adoption of IFRSs

127

6.1 Disclosure Initiative (Amendments to IAS 7) 127

6.2 Recognition of Deferred Tax Assets for

Unrealised Losses (Amendments to IAS 12) 128

6.3 IFRS 15 Revenue from Contracts with

Customers

128

6.4 IFRS 9 Financial Instruments (2014)

133

6.5 IFRS 9 Financial Instruments (2013)

160

6.6 IFRS 9 Financial Instruments (2010)

182

6.7 IFRS 9 Financial Instruments (2009)

201

6.8 IFRS 9 Financial Instruments (own credit

requirements)

219

6.9 Classification and Measurement of

Share-based Payment Transactions

(Amendments to IFRS 2)

221

6.10 IFRS 16 Leases

222

Appendix

226

New standards or amendments for 2016 and

forthcoming requirements

226

Keeping in touch

228

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

Organisation of the text

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.

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 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 Insights 4.1.190.10

Paragraph 51 of IAS 1.

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.

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