Enquiry:

Sections 4.2(ea) and 4.2(f) of IFRS for SMEs states that “investment property carried at cost less accumulated depreciation and impairment” and “investment property at fair value through profit or loss” respectively, should be shown as Iine items on the statement of financial position.

Our question is that should the complete nomenclature as mentioned herewith be shown on the statement of financial position together with the amounts of accumulated depreciation and impairment, or an abbreviated name can be shown on the face of the statement of financial position and amounts of depreciation and impairment be given in the notes?

 

Opinion:

Section 4.2 of the IFRS for SMEs lists down minimum line items, to be presented, in the statement of financial position. The relevant part of section 4.2 of the IFRS for SMEs is reproduced hereunder:

“4.2 As a minimum, the statement of financial position shall include line items that present the following amounts:

(a) ……

(ea) investment property carried at cost less accumulated depreciation and impairment”.

Section 16 of the IFRS for SMEs deals with investment property and section 17 of the IFRS for SMEs deals with the property, plant and equipment. However, section 17.31 contains the disclosure requirements relating to property, plant and equipment and investment property carried at cost. Therefore, the disclosure requirements of investment property carried at cost less accumulated depreciation and impairment are set out in section 17 of the IFRS for SMEs.

Section 17.31 requires that:

“An entity shall disclose the following for each class of property, plant and equipment determined in accordance with paragraph 4.11(a) and separately for investment property carried at cost less accumulated depreciation and impairment:

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

          (b) ………………..;

         (e) a reconciliation of the carrying amount at the beginning and end of the reporting period showing separately:

                (i) additions;

                (ii) disposals;

                (iii) acquisitions through business combinations;

                   ……………………………………………………………………………

                (vii) depreciation; and

                 (viii) other changes.           (Underline is ours)

Based on the above, the net amount of investment property carried at cost shall be presented in the statement of financial position, and the reconciliation of opening and closing carrying amounts, including depreciation charge and impairment shall be disclosed through the notes to the financial statements.

From the above provisions of IFRS of SMEs, it is apparent that net amount of investment property will be presented on the face of the statement of financial position. The depreciation charge and impairment with reconciliation of opening and closing amounts will be disclosed through the notes.

(October 02, 2017)