Measurement uncertainty

Measurement uncertainty – Uncertainty that arises when the result of applying a measurement basis is imprecise and can be determined only with a range.

Measurement uncertainty arises when a measure cannot be determined directly by observing prices in an active market and must instead be estimated.

The level of measurement uncertainty associated with a particular measurement basis may affect whether information provided by that measurement basis provides a faithful representation of an entity’s financial position and financial performance. A high level of measurement uncertainty does not necessarily prevent the use of a measurement basis that provides relevant information.

However, in some cases the level of measurement uncertainty is so high that information provided by a measurement basis might not provide … Read more

IAS 37 Launch your Climate Risk Reporting

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IAS 37 Launch your Climate Risk Reporting – In February 2020, the Governance Institute Australia published a practical guide to reporting against ASX Corporate Governance Council’s Corporate Governance Principles and Recommendation. IAS 37 Launch your Climate Risk Reporting

Recommendation 7.4 of the new ASX Corporate Governance Council’s Principles encourages entities for the first time to consider and report upon any material exposure to climate change risk. This practical new guide helps you to identify and disclose your climate change risks. IAS 37 Launch your Climate Risk Reporting

Review the guide on the Governance Institute Australia’s website. IAS 37 Launch your Climate Risk Reporting

Here is a summary: IAS 37 Launch your Climate Risk Reporting

Directors’ duties and

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The Objective of General Purpose Financial Reporting

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The Objective of General Purpose Financial Reporting  is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit.

“Financial Reporting is a practical exercise in communication not a theoretical or academic construct. We should not lose sight of the importance of financial statements as a tool for communication; currently we are losing the audience as they are becoming too complex.” – The Hundred Group of Finance Directors, UK, 2006.

A company being a large body of shareholders … Read more

IFRS 12 Disclosure of Interest in Other Entities

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IFRS 12 Disclosure of Interests in Other Entities is a consolidated disclosure standard requiring a wide range of disclosures about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated ‘structured entities’. Disclosures are presented as a series of objectives, with detailed guidance on satisfying those objectives.

An investment entity that prepares financial statements in which all of its subsidiaries are measured at fair value through profit or loss presents the disclosures relating to investment entities required by IFRS 12. [IFRS 12 6 b ii]

IFRS 12 requires disclosure of the significant judgments and assumptions that an entity has made in determining the nature of its interest in another entity or arrangement. It also Read more

Disclosures material joint ventures

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Disclosures material joint ventures – The disclosures may be aggregated for interests in similar entities, with the method of aggregation being disclosed (aggregation resembling/replacing consolidation). A quantitative and qualitative analysis, taking into account the different risk and return characteristics of each entity, is made in order to determine the aggregation level. IFRS 12 gives the following examples of aggregation levels: by nature of activities, by industry or by geography. [IFRS 12.4, B2–B6]

However, as a minimum, information is given separately for interests in subsidiaries, joint ventures, joint operations, associates and unconsolidated structured entities. [IFRS 12.B4–B6]

Note a) [IFRS 12 B14(a)]


IFRS 12 indicates that the amounts included in the summarised Read more

Investments material associates disclosures

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Investments material associates disclosuresInvestments material associates disclosures – The subject of investments material associates disclosures may be aggregated for interests in similar entities, with the method of aggregation being disclosed (aggregation being consolidation). A quantitative and qualitative analysis, taking into account the different risk and return characteristics of each entity, is made in order to determine the aggregation level. IFRS 12 gives the following examples of aggregation levels: by nature of activities, by industry or by geography. [IFRS 12.4, B2–B6]

However, as a minimum, information is given separately for interests in subsidiaries, joint ventures, joint operations, associates and unconsolidated structured entities. [IFRS 12.B4–B6]

IFRS 12 emphasises that it’s necessary for financial statement preparers to strike … Read more

Disclosures in First IFRS Financial statements

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Disclosures in First IFRS Financial statements – A first-time adopter must apply all of the presentation and disclosure requirements in IFRSs. IFRS Reference: [IFRS 1, paras 20, 23 – 27A, 29 – 31B]

The first-time adopter must also explain how the transition from previous GAAP to IFRSs affected its reported financial position, financial performance and cash flows. As a result, an entity’s first IFRS financial statements must include the following reconciliations:

Note that the dates presented are examples for an entity with a calendar year end (adopting IFRS in 20X3) that presents only one comparative period.

Nature of disclosure

Comparative year ended December 31, 20×2

Opening as at January 1, 20×2

Reconciliation of equity as at:

  • the
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Disclosure requirements IFRS 4 and IFRS 17

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Disclosure requirements IFRS 4 and IFRS 17 – Explanation of recognized amounts from IFRS 4 to IFRS 17

1 Introduction Disclosure requirements IFRS 4 and IFRS 17

[IFRS 17 (98), IFRS 17 (93)-(96)]

Disclosure requirements IFRS 4 and IFRS 17IFRS 4 requires an entity to disclose information that identifies and explains the amounts in its financial statements arising from insurance contracts. In order to comply with this objective, IFRS 4 outlines what should be disclosed regarding reconciliations, policies, methods and processes but provides limited guidance on how these disclosure requirements should be met.

IFRS 17 requirements are much more extensive. It requires the entity to provide specific reconciliations showing how the net carrying amounts of insurance contracts changed during the Read more

Disclosure recognised insurance amounts

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Explanation of recognised amounts Disclosure recognised insurance amountsDisclosure recognised insurance amounts

An entity is required to disclose the following:

  • Reconciliations that show how the net carrying amount of contracts within the scope of IFRS 17 changed during each period (see 1 below)
  • Disclosures for contracts other than those to which the entity applies the premium allocation approach:
    • Analysis of insurance revenue recognized in the period for contracts (see 2 below) Disclosure recognised insurance amounts
    • Analysis of the effect of contracts initially recognized in each period (see 3 below) Disclosure recognised insurance amounts
    • Explanation of when the entity expects to recognize the contractual service margin (CSM) at the end of the reporting period in profit
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