Accounting Standards and Guidance

FRC Financial Reporting Standards (FRSs)

UK/Irish accounting framework (effective for periods beginning on or after 1 Jan 2015)

FRS 101 Reduced Disclosure Framework

Basis for Conclusions FRS 101 Reduced Disclosure Framework
IAS 36 Impairment of assets
Disclosure exemptions for cash-generating units
73In May 2013, the IASB amended IAS 36 Impairment of Assets. At the time, FRS 101 already allowed disclosure exemptions for qualifying entities from paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36. These disclosures relate to cash-generating units that, either individually or in combination, have a significant amount of goodwill or intangible assets with indefinite useful lives allocated to them. These exemptions were only permitted if equivalent disclosures were included in the consolidated financial statements of the group.
74The IASB amended the disclosure requirements of paragraph 130(f) in relation to fair value, when fair value less costs of disposal is the recoverable amount of an individual asset or cash-generating unit.
75On balance, it was considered that the additional detailed disclosure requirements of paragraph 130(f) of IAS 36 are unlikely to provide relevant information to users of the financial statements of qualifying entities, given that general information on impairments will be disclosed through the requirements of paragraphs 130(a) to (e).
76In addition, this detailed information would be available in the consolidated financial statements, and if no disclosure is made in the consolidated financial statements on the grounds of materiality, the relevant disclosures would need to be made at subsidiary level13.
77However, it was noted that should an exemption be introduced for paragraph 130(f) in its entirety, basic information about the basis of measurement of the fair value would be lost, and an imbalance between the disclosure requirements relating to fair value less costs of disposal and value in use would exist. Therefore in conclusion:
 (a)an exemption was not introduced from the requirements of subparagraph 130(f)(i) and entities should provide disclosure of the level of the fair value hierarchy used in measuring fair value; and
 (b)an exemption was introduced from subparagraphs 130(f)(ii) and 130(f)(iii), provided that equivalent disclosures are included the consolidated financial statements of the group.
13 As required by paragraph AG10 of the Application Guidance to FRS 100 Application of Financial Reporting Requirements.
Top Licence and copyright © 2018, LexisNexis Group a division of Reed Elsevier (UK) Ltd. All rights reserved.