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Disclosing Fair Values in
Annual Financial Statements
Applying IFRS 13 to Investment
Properties (A supplement)
October, 2013
This newsletter is one of a
series to illustrate and explain
significant new IFRS disclosure
requirements applicable
for 2013 annual financial
statements.
Other newsletters in the series
include:
Disclosing Fair Values in
Annual Financial Statements—
Applying IFRS 13
Disclosing Employee Benefits
in 2013 Annual Financial
Statements
Offsetting of Financial
Instruments—Disclosure
in 2013 Annual Financial
Statements
Disclosing Interests in Other
Entities in 2013 Annual
Financial Statements
For years starting in 2013, Canadian public companies must disclose enhanced
information about fair value measurements used in their IFRS annual
financial statements in accordance with IFRS 13, Fair value measurement.
This newsletter is a supplement to Disclosing Fair Values in Annual Financial
Statements – Applying IFRS 13 and illustrates the application of the IFRS 13
disclosure requirements to non-financial assets measured on a recurring basis,
using investment properties as an example.
Frequently fair value measurements of non-financial assets will be classified as Level 3 in
the hierarchy, resulting in significant incremental disclosures in respect of these assets when
they are measured at fair value on a recurring basis.
Changes include:
•
A “stand back” test to consider whether disclosure objectives are met.
•
New criteria for grouping assets and liabilities into classes for fair value disclosure
purposes.
•
Expanded guidance on assigning measurements as Level 1, 2 or 3 in the fair value
hierarchy, including measurements of non-financial assets and liabilities.
•
More focused and detailed disclosures of Level 3 measurements, including a description
of a company’s valuation processes.
In this newsletter we illustrate the type of disclosures that a hypothetical company, Sample
Co., might provide in its 2013 annual financial statements in respect of fair values of
investment property. The illustrative disclosures are accompanied by explanatory notes that
discuss the changes to the requirements and the judgments and other determinations that
the company has made in applying them. We also highlight disclosures that are incremental
to those required for 2012 annual financial statements. In this newsletter, Sample Co. is a
real estate company with a calendar year-end.
This illustration does not address the disclosure requirements for non-recurring fair value
measurements or financial instruments measured at fair value. It also does not address the
additional IFRS 13 requirements regarding disclosures of fair value when the cost model
for investment properties is applied. Illustrative examples and explanatory notes for such
circumstances can be found in PwC’s newsletter Disclosing Fair Values in Annual Financial
Statements – Applying IFRS 13.
We hope you will find this newsletter helpful. If you have any questions, please do not
hesitate to contact your local PwC representative or office.
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Explanatory
Notes (ENs)
EN 1
EN 2
Note Z. Fair value of investment properties
Commentary
This note illustrates the minimum disclosures required by IFRS 13, Fair value measurement in annual financial
statements for non-financial assets measured at fair value on a recurring basis. Investment property is used
as an example. Similar disclosures would be required for other recurring fair value measurements of nonfinancial assets such as:

Agricultural and biological assets in scope of IAS 41, Agriculture.

Property plant and equipment measured at fair value using the revaluation model in IAS 16, Property
plant and equipment.
The items highlighted in yellow represent the effect of new requirements in IFRS 13 for annual periods which
are explained in the accompanying notes.
The note does not illustrate all the disclosures required for investment properties by IAS 40, Investment
property or other IFRS. Entities will have to consider the impact of the adoption of IFRS 13 on their existing
accounting policy note. The determination of whether information regarding the fair values of investment
property is a significant judgment or source of estimation uncertainty is entity specific and the disclosure
requirements in IAS 1, Presentation of financial statements for these areas have not changed for 2013. Such
disclosures are beyond the scope of this illustrative note.
This example illustrates one possible format for the disclosures; there may be others.
EN 3
The following presents the changes in fair value for all investment properties:
Total
Balance as at January 1, 2012
$ 774,276
Purchases of investment properties:
-
Acquisitions of properties
55,823
-
Subsequent expenditure on investment
property
35,823
-
Initial direct leasing costs
Amortization of initial direct leasing costs
(1,428)
Sales of investment properties
(43,827)
Change in fair value of investment properties
142,305
Balance as at December 31, 2012
PwC
5,928
$ 968,900
2
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Total
Office
Retail
Canada
EN 5
EN 6
Balance as at January 1, 2013
Industrial
Canada
$ 968,900
$ 340,132
79,723
53,749
287,932
$
US
253,643
$
Canada
–
$ 375,125
–
–
25,974
171,650
–
116,282
17,998
6,921
1,459
487
9,131
843
394
164
89
196
386,496
$ 232,714
$ 1,623
(118,437)
(13,927)
(10,745)
–
(93,765)
(27,921)
(5,832)
(11,255)
–
(10,834)
$ (146,358)
$ (19,759)
$ (22,000)
–
$ (104,599)
81,973
48,459
17,233
23,859
(7,578)
( 1,418)
(739)
(308)
(5)
(366)
47,720
$ 16,925
$ 23,854
(5,525)
–
–
(5,525)
–
(5,525)
–
–
(5,525)
–
$1,284,068
$ 600,807
$ 250,191
$ 135,187
$ 297,883
$ 12,343
$ 23,854
$ (15,827)
Purchases of investment properties:
-
Acquisitions of properties
-
Acquisitions through business
combinations
-
Subsequent expenditure on investment
property
-
Lease incentives and initial direct
leasing costs
Total additions to investment
properties
$
$ 116,858
$
35,301
Disposals of investment properties:
-
Sales of investment properties
-
Transfers to disposal groups classified
as held for sale
Total disposals of investment
properties
EN 8
$
Gain and losses included in net income:
-
Change in fair value of investment
properties
-
Amortization of initial direct
leasing costs
Total gains (losses) included in net
income
$
80,555
$
$
(7,944)
Gains and losses included in other
comprehensive income:
-
Foreign currency translation loss
Total gains (losses) included in other
comprehensive income
Balance as at December 31, 2013
$
$
Change in unrealized gains (losses)
included in net income for the year ended
December 31, 2013:
-
PwC
Change in fair value of investment
properties
$
65,293
$
44,923
3
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
EN 4
Investment properties measured at fair value in the statement of financial position are categorized by level
according to the significance of the inputs used in making the measurements.
December 31,
2013
EN9
Quoted prices in
active markets for
identical
instruments
(Level 1)
Significant other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Recurring measurements
Investment properties
Office
$
600,807
$
–
$
–
$
600,807
Retail
- Canada
- United States
Industrial
Total
250,191
135,187
–
–
250,191
135,187
297,883
–
–
297,883
–
$ 1,284,068
$ 1,284,068
$
–
$
EN 7
The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as of the
date of the event or change in circumstances that caused the transfer. There were no transfers in or out of
Level 3 fair value measurements for investment properties during the period.
EN 10
Fair values for investment properties are calculated using the direct income capitalization method, which
results in these measurements being classified as Level 3 in the fair value hierarchy. In applying the direct
income capitalization method the stabilized net operating income (NOI) of each property is divided by an
appropriate capitalization rate.
EN 11
PwC
Capitalization rate
based on actual location, size and quality of the property and taking into account
any available market data at the valuation date.
Stabilized NOI
revenues less property operating expenses adjusted for items such as average
lease up costs, long-term vacancy rates, non-recoverable capital expenditures,
management fees, straight-line rents and other non-recurring items.
Investment properties are valued on a highest and best use basis. For all of the Company’s investment
properties the current use is considered to be the highest and best use.
4
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
EN12
Significant unobservable inputs in Level 3 valuations are as follows:
December 31, 2013
Class
Input
Office
Retail
Canada
-
United States
Industrial
Range
Weighted
average
Stabilized NOI
Capitalization rate
N/A
6.25%-7%
$ 39,473
6.6%
Stabilized NOI
Capitalization rate
Stabilized NOI
Capitalization rate
N/A
5.25%-6.5%
N/A
6%-7.25%
$ 14,386
5.8%
$ 9,044
6.70%
Stabilized NOI
Capitalization rate
N/A
6.75%-8.25%
$ 21,954
7.35%
As at December 31, 2012 the fair value of investment properties was calculated using a weighted average
capitalization rate of 6.9% (a range of 5.5%-9.5%).
EN 13
Generally, an increase in stabilized NOI will result in an increase to the fair value of an investment property.
An increase in the capitalization rate will result in a decrease to the fair value of an investment property. The
capitalization rate magnifies the effect of a change in stabilized NOI, with a lower capitalization rate resulting
in a greater impact of a change in stabilized NOI than a higher capitalization rate.
EN 14
Valuation processes
The Company’s finance department is responsible for determining fair value measurements included in the
financial statements, including Level 3 fair values of investment properties. The Company’s finance
department includes a valuations team that prepares a valuation for each investment property every quarter.
The valuations team is headed by a professionally qualified valuer.
At each financial year end date the Company obtains external valuations for approximately 33% of the
investment property portfolio. Each property is valued by an independent valuer at least once every 3 years.
In 2013 properties with a value of $409,231 were valued externally (2012 – $323,873). The external
valuations are prepared by independent professionally qualified valuers who hold a recognized relevant
professional qualification and have recent experience in the location and category of the respective property.
For properties subject to an independent valuation report the valuations team verifies all major inputs to the
valuation and reviews the results with the independent valuer.
The valuation team reports directly to the Chief Financial Officer (CFO) and the Audit Committee (AC).
Discussions of valuation processes, key inputs and results are held between the CFO, AC and the valuation
team at least once every quarter, in line with the Company’s quarterly reporting dates.
Changes in Level 3 fair values are analyzed at each reporting date during the quarterly valuation discussions
between the CFO, AC and the valuation team. As part of this discussion, the team presents a report that
explains the reasons for the fair value movements.
PwC
5
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Change
Discussion
1.
Effective for years beginning on or after January 1, 2013, entities must apply IFRS
13, Fair value measurement. IFRS 13 defines “fair value” and provides guidance
on the how to measure fair value in financial statements and also sets out
disclosures required when fair value measurements are used or disclosed.
Overview
As a result of IFRS 13’s broad scope, the standard’s measurement and disclosure
requirements apply to recurring fair value measurements of non-financial assets,
such as investment properties, and to many disclosures of fair value that are made
in the financial statements, including those that are required when an entity
applies the cost method to measure its investment properties.
We have summarized the major changes from the 2012 annual
requirements and their effect on Sample Co.’s financial statement
disclosures below as they relate to investment property carried at
fair value.
A more detailed review of the scope provisions of IFRS 13 and an
illustration of the disclosure requirements to other assets and
liabilities is provided in PwC’s newsletter “Disclosing Fair Values in
Annual Financial Statements – Applying IFRS 13”.
2.
Stand back
assessment of
the adequacy of
disclosures
(IFRS 13.91 and
.92)
In 2012, entities had to provide only the minimum disclosures specified by
individual IFRSs, subject to the fair presentation criteria set out in IAS 1,
Presentation of financial statements. In 2013, disclosures regarding fair values
must be sufficient to help users of its financial statements assess the following:
(a) The valuation techniques and inputs used to develop recurring fair value
measurements, including those used to measure non-financial assets; and
(b) For measurements involving the use of significant unobservable inputs, the
effect of those measurements on profit or loss or other comprehensive
income.
Assessments of the sufficiency of disclosures involve considering the level of
detail necessary, how much emphasis to place on each requirement, how much
aggregation or disaggregation to undertake and whether the users of financial
statements need additional information beyond the minimum required by IFRS.
After considering its compliance with the requirements of IFRS
13.93-.99, Sample Co. concluded that further disclosures relating to
the fair values of investment properties were not necessary to meet
the disclosure objectives of the standard.
PwC
6
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Change
Discussion
3. Comparative
Transitional provisions of IFRS 13 state the minimum disclosures are not
required for comparative periods before the initial application period.
Accordingly “new” disclosures that IFRS 13 requires do not need to be provided
for prior years. In some cases disclosures over inputs, assumptions and
sensitivity of investment property fair values now required by IFRS 13 may have
been made voluntarily or to comply with other standards, such as the
requirements in IAS 1 to disclose sources of significant measurement uncertainty.
period
disclosures
(IFRS 13.C3)
To the extent that fair value disclosures required by IFRS 13 were previously
made in respect of prior periods, we believe these disclosures should be brought
forward to the 2013 annual financial statements as comparative information.
In 2012, in compliance with IAS 40, Sample Co. presented a
reconciliation of investment properties carried at fair value on a
total portfolio basis and provided information on assumptions used
to value each property on an aggregated weighted average basis.
Sample Co. has continued to present the information provided in the
2012 financial statements as comparative information and provides
the additional disclosures required by IFRS 13 by class of assets (see
EN5) for its 2013 annual period only.
4. Disclosing the
level in the fair
value
hierarchy
(IFRS 13.93(b))
New in 2013 is the requirement to categorize recurring fair value measurements
for non-financial assets into the fair value hierarchy. The fair value hierarchy
itself is the same as that required for financial instruments in 2012.
5. Identifying
classes of
assets and
liabilities
(IFRS 13.93
and .94)
IFRS 13 requires disclosure of fair value information by class of assets and
liabilities. In establishing the number and type of classes to present, entities have
to consider the nature, characteristics and risks of the asset or liability and where
its measurement is categorized in the fair value hierarchy table.
Sample Co. has classified its investment property fair values into the
fair value hierarchy and determined that all property fair values are
Level 3 as they contain at least one significant unobservable input.
This determination drives the extent of other disclosures required
for the fair values of investment property.
IAS 40 did not previously require disclosures for investment properties to be
disaggregated into classes of assets. Generally, disclosures on investment
properties were made on a portfolio basis or a segment level. For the purposes of
fair value disclosures under IFRS 13, an entity must assess what classes of
investment property reflect the nature, characteristics and risks of the assets and
their categorization in the measurement hierarchy and present fair value
information on this basis. IFRS 13 states that for assets and liabilities included in
Level 3, the number of classes may need to be greater because fair value
measurements have a greater degree of uncertainty and subjectivity. For
example, if there is a wide range of capitalization rates used in valuing a number
of properties this might suggest the properties have different risks or
characteristics and therefore there is more than one class of properties.
After reviewing the new criteria, Sample Co. determined that it has
four classes of investment properties. Although all properties are
classified as Level 3 in the fair value hierarchy, Sample Co.
considered that retail, office and industrial properties present
significantly different risks. In addition, Sample Co. considered that
further disaggregating the retail properties based on geographic
PwC
7
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Change
Discussion
location is warranted given the different nature, characteristics and
risks of these properties. The format used by Sample Co. meets the
requirements in IFRS 13.99 to use a tabular presentation unless
another format is appropriate and reconciles to the amount
recognized in statement of financial position.
6.
Reconciliations
(IFRS 93(e))
In 2012, entities had to reconcile the opening and closing balances reported for
investment properties as a total in accordance with IAS 40.76.
For 2013, IFRS 13 introduced additional reconciliation requirements for each
class of Level 3 fair value measurements, specifically requiring separate
disclosure of changes attributable to:
(i)
Gains and losses recognized in profit or loss, and the line item(s) in profit
or loss in which those gains and losses are recognized.
(ii)
Total gains or losses recognized in other comprehensive income (OCI) and
the line item(s) in OCI in which those gains and losses are recognized.
(iii) Purchases, sales, issues and settlements, with each movement disclosed
separately.
(iv) Transfers into or out of Level 3, and the reasons for the transfers.
In 2013, Sample Co. had categorized all investment properties as
Level 3 and therefore combined the IAS 40 reconciliation
requirements with the IFRS 13 Level 3 reconciliation requirements.
As a result Sample Co. included the required information for each
class of investment property.
In addition, Sample Co. included within the reconciliation a
breakdown of each line item in net income and, separately, in other
comprehensive income where gains and losses related to investment
property measurements have been recognized. This breakdown
could also have been provided as a footnote to the table.
As there were no transfers in or out of Level 3 measurements,
Sample Co. did not include any transfers in their reconciliation.
7. Transfers
between levels
in the fair
value
hierarchy and
policies for
transfers
(IFRS 13.93(c)
and (e)(iv),
13.95)
PwC
In 2013, entities must now disclose and discuss all transfers of fair value
measurements between levels of the hierarchy, e.g., between Level 2 and Level 3,
if the asset or liability is measured at fair value on recurring basis and is on hand
at the end of the period.
Further, it is now necessary for entities to disclose and consistently follow the
same policy for determining when transfers between levels are deemed to have
occurred (e.g., the date of the event or change in circumstance that caused the
transfer, the beginning of the period or the end of the period).
In 2013, Sample Co. disclosed its policy for transfers among levels
and transfers occurring during the period in accordance with the
revised requirements. As all Sample Co.’s investment properties are
categorized as Level 3 there were no transfers of fair value
measurements for investment properties in the period. Its disclosure
that no transfers occurred in a period is optional. If there were
8
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Change
Discussion
movements in or out of Level 3 however, they would have to be
included in the reconciliation table (See EN6).
8. Unrealized
gains and
losses for Level
3 estimates
(IFRS 13.93(f))
For Level 3 recurring measurements, including those of non-financial assets,
entities must now disclose the amount of the change in unrealized gains and
losses relating to those assets and liabilities held at the end of the reporting
period. The specific line item(s) where the gains and losses are recognized must
also be identified.
Sample Co. has appended these disclosures to the reconciliation of
investment property balances. The amounts noted for the change in
unrealized gains and losses are not equal to the total gains and
losses recognized in net income for the period as the total gains and
losses include amounts realized on the disposal of investment
property and for properties reclassified out of investment property
during the period.
9. Separating
recurring from
non-recurring
measurements
in the fair
value
hierarchy
(IFRS 13.93(a)
and (b))
Starting in 2013, certain of the disclosure requirements depend on whether fair
value measurements included in the fair value hierarchy table are recurring or
non-recurring. A recurring fair value measurement is one that IFRS requires or
permits in the statement of financial position at the end of each reporting period.
A non-recurring measurement is one that IFRS requires or permits in the
statement of financial position in particular circumstances. Disclosure of the level
of the fair value hierarchy is required for both categories of fair value
measurement.
10. Valuation
techniques and
inputs
(IFRS
13.93(d))
IAS 40 does not require entities to disclose the valuation techniques used to value
investment properties, although many real estate entities may include some
information as part of a detailed accounting policy note.
In its 2013 fair value disclosures, Sample Co. has identified in the
note disclosure investment property fair value measurements as
recurring measurements.
In 2013, the valuation techniques used for measurements of non-financial assets
classified as Level 2 or Level 3 in the fair value hierarchy and the “inputs” used in
those measurements (e.g., the fact that an entity discounted cash flows in
estimating fair value) are disclosed.
Valuation techniques must be applied to the unit being measured. For
investment properties this is generally at the individual property level. IFRS 13
continues guidance formerly in IAS 40 specifying that portfolio premiums and
synergies would not be included in the determination of fair values of investment
properties as they relate to the number of properties held by the entity, and are
not a characteristic of the investment property unit being measured.
Disclosure of the quantitative information about inputs (e.g., the actual discount
rate used) is required only for Level 3 measurements (see “quantitative
information about unobservable inputs” in EN12 on page 10).
Consistent with the new requirements, Sample Co. has included
information on the valuation techniques used for recurring
measurements of investment property. Sample Co. uses the direct
income capitalization method.
PwC
9
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Change
Discussion
Disclosures about quantitative information are limited to Level 3
measurements. There were no changes in the valuation techniques
during the period.
11. Highest and
best use of
non-financial
assets
(IFRS 13.93(i))
From 2013, entities must ensure that the valuation premise used to value
investment property and other non-financial assets is the highest and best use of
the asset. The highest and best use is the one that maximises value to market
participants of the asset either by itself or with other assets and liabilities. If an
asset being measured at fair value is not currently used in its highest and best use
then this fact must be disclosed, along with the reasons why.
Sample Co. is a real estate company focused on managing a portfolio
of investment properties. The Company has reviewed each of its
investment properties and has concluded it is using each of its
properties in their highest and best use. The disclosure that current
use is considered to be the highest and best use is voluntary.
12. Quantitative
information
about
unobservable
inputs
(IFRS 3.93(d))
In 2012, entities were not required by IAS 40 to disclose significant assumptions
or quantitative data about investment properties, unless they did so as part of
their disclosure on sources of significant measurement uncertainty.
Starting in 2013, entities are required to provide quantitative information in
respect of significant unobservable inputs used in all recurring or non-recurring
Level 3 fair value measurements. The entity does not have to create quantitative
information for unobservable inputs that were not developed by the entity (e.g.,
an entity uses prices from prior transactions or third party pricing information
without adjustment) but an entity cannot ignore information that is reasonably
available to it.
IFRS 13 does not provide specific guidance on what quantitative information is
necessary but requires entities to provide this information, at a minimum, for
each class of assets and liabilities measured at fair value. Disclosure should
contain sufficient detail to allow users to understand the unobservable inputs
used and how those inputs vary over time.
To be in accordance with IFRS 13.99, information generally should be provided
in a tabular format.
In 2013, Sample Co. provides quantitative information about
significant unobservable inputs used in fair value measurement of
its investment properties. It has determined that both the
capitalization rate and the stabilized NOI are significant
unobservable inputs as management uses internally generated data
and applies significant judgment in determining the appropriate
capitalization rate for a property and in adjusting NOI to obtain
stabilized NOI.
(Note: The quantitative amounts in the accompanying note are arbitrary and
have been used for illustrative purposes only. The applicable rates and
assumptions will depend on the specific facts and circumstances.)
PwC
10
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Change
13. Sensitivity
analysis
(IFRS
13.93(h)(i))
Discussion
Starting in 2013, entities must provide:
(a)
A narrative description of the sensitivity of fair value measurements to
changes in unobservable inputs that might result in a significantly higher or
lower fair value; and
(b)
If there are inter-relationships with other unobservable inputs, a
description of the inter-relationships and how they might magnify or
mitigate the effects.
The requirements in IFRS 13 to disclose the effects of changing one or more
unobservable inputs (i.e., a quantitative sensitivity analysis) apply only to
financial assets and liabilities and not to non-financial assets such as investment
property. However, if an entity previously provided an analysis of the sensitivity
of investment property fair values to changes in assumptions, for example to
meet the disclosure requirements for measurement uncertainty in IAS 1, then we
would expect these disclosures to continue to be relevant in 2013.
In 2013, Sample Co. added a description of the sensitivity to
significant unobservable inputs and their inter-relationships for the
Level 3 recurring measurements of investment properties. As the
same valuation techniques were used for all classes of investment
property the disclosures made apply to all Level 3 measurements of
investment properties. If Sample Co. used a different valuation
technique for some property (e.g., discounted cash flow) then a
separate sensitivity analysis would be provided for these properties.
14. Valuation
processes
estimates
(IFRS 13.93(g))
In 2012, entities were required to disclose the extent to which the fair value of
investment property was based on a valuation by an independent valuer.
Disclosure of any significant adjustments to the valuations obtained from an
independent valuer was also required.
Beginning in 2013, entities are required to include a description of its valuation
processes for items that are measured at fair value in the statement of financial
position and classified as Level 3 in the fair value hierarchy. This includes, for
example, how it decides its valuation policies and procedures and analyses
changes in fair value measurements from period to period.
In addition to the discussion on the use of independent valuations, an entity
might disclose the following to comply with this requirement:
PwC

Who decides the entity’s valuation policies and procedures, to whom that
individual or group reports, and the internal reporting procedures in place
(e.g., whether and, if so, how audit and other relevant Board committees
discuss and assess the fair value measurements);

How the entity determined that third-party information, such as appraisers,
broker quotes or pricing services, used in the fair value measurement was
developed in accordance with IFRS;

The methods used to develop and substantiate the unobservable inputs used
in a fair value measurement; and

The process for analyzing changes in fair value measurements from period to
period.
11
Disclosing fair values in annual financial statements
Applying IFRS 13 to investment properties (A supplement)
Change
Discussion
In 2013, Sample Co. supplemented its previous disclosures regarding
independent valuations and provided an explanation of the
valuation processes it followed in making Level 3 estimates.
15. Other changes
not illustrated
in this
newsletter
The following disclosures are not illustrated as they are not applicable to Sample
Co.’s investment properties:
1.
Disclosures required regarding the disclosure of fair value in the financial
statements. (IFRS 13.97). For an illustration and explanation of the required
disclosures for disclosed fair values please see PwC’s newsletter “Disclosing
Fair Values in Annual Financial Statements – Applying IFRS 13”.
2. The use of the “portfolio exception” for measuring a group of financial assets
and financial liabilities on a net position basis. (IFRS 13.96)
3. The existence of inseparable third-party credit enhancements. (IFRS 13.98)
4. Disclosure requirements for fair value measurements classified as Level 1 or
Level 2 in the fair value hierarchy.
PwC
12
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