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    Illustrative IFRSconsolidated financialstatements 2015Investment property

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    November 2015

  • Illustrative IFRS consolidated financial statements 2015

    Investment property PwC Contents

    Contents

    Introduction 1

    IP Group consolidated financial statements for the yearended 31 December 2015 3

    Consolidated statement of financial position 4

    Consolidated statement of comprehensive income 7

    Consolidated statement of changes in equity 14

    Consolidated statement of cash flows 16

    Notes to the consolidated financial statements 19

    Independent auditor's report 69

    Appendix I Consolidated statement of comprehensive income byfunction of expense 70

    Appendix II Consolidated cash flow statement direct method 71

  • Illustrative IFRS consolidated financial statements 2015

    Investment property PwC 1

    This publication provides an illustrative set of consolidated financial statements, prepared in accordance withInternational Financial Reporting Standards (IFRS), for a fictional investment property group (IP Group). TheGroup prepares its consolidated financial statements in accordance with IFRS as issued by the IASB (that is, itdoes not prepare the consolidated financial statements in accordance with IFRS as adopted by the EuropeanUnion).

    IP Group is an existing preparer of IFRS consolidated financial statements; IFRS 1, First-time adoption ofInternational Financial Reporting Standards, is not applicable. Guidance on financial statements for first timeadopters of IFRS is available at www.pwc.com/ifrs.

    This publication is based on the requirements of IFRS standards and interpretations forfinancial years beginning on or after 1 January 2015. The Group did not early-adopt any standard orinterpretation.

    The areas in which we have made (significant) changes to presentation have been highlighted in pink. For 2015,

    the only significant change is in the section titled New and amended standards adopted by the Group.

    We have attempted to create a realistic set of consolidated financial statements for an investment propertygroup with emphasis on real estate (IAS 40, Investment Property, and IAS 2, Inventories). Certain types oftransaction have been excluded, as they are not relevant to the Groups operations. The illustrated Group doesnot have associates, joint ventures, non-controlling interests, government grants, defined benefit plans,treasury shares, preferred shares, convertible debt or share options, nor is the group exploring mineralresources. There were no disposals of subsidiaries, and no issue of shares in the two years presented. Pleaserefer to PwCs Illustrative IFRS consolidated financial statements for 2015 year-ends and IFRS disclosurechecklist 2015 for disclosures relating to these items. Illustrative IFRS financial statements 2015 Investmentfunds and Illustrative IFRS financial statements 2015 Private equity may also be relevant to some real estateentities.

    The shares of the parent company of the illustrated group are publicly traded; disclosures on segments andearnings per share are therefore included.

    Other items that entities may choose (or, in certain jurisdictions, be required) to include in documentscontaining financial statements, such as a directors report or operating and financial review, are not illustratedhere.

    PwC commentary has been provided, in grey boxes, to explain the detail behind the presentation of a number ofchallenging areas. These commentary boxes relate to the presentation in: the consolidated statement offinancial position, the consolidated statement of comprehensive income, the consolidated statement of changesin equity, the consolidated statement of cash flows and the summary of significant accounting policies.

    The example disclosures should not be considered the only acceptable form of presentation. The form andcontent of each reporting entitys consolidated financial statements are the responsibility of the entitysmanagement. Alternative presentations to those proposed in this publication may be equally acceptable if theycomply with the specific disclosure requirements prescribed in IFRS. Examples of alternative presentations ofthe statements of comprehensive income and cash flows have been included in Appendix I and Appendix IIrespectively.

    These illustrative consolidated financial statements are not a substitute for reading the standards andinterpretations themselves or for professional judgement as to fairness of presentation. They do not cover allpossible disclosures that IFRS requires, nor do they take account of any specific legal framework or any stock

    Introduction

  • Illustrative IFRS consolidated financial statements 2015

    Investment property PwC 2

    exchange or other regulations. Further specific information may be required in order to ensure fair presentationunder IFRS. We recommend that readers refer to our publication IFRS disclosure checklist 2015.

    StructureThe publication consists of the IP Group consolidated financial statements and the auditors report. There aretwo appendices that cover additional disclosures and alternative presentations of primary statements.

    IP Group illustrative consolidated financial statements 3

    Notes to the consolidated financial statements 19

    Independent auditors report 69

    Appendices

    Appendix I Consolidated statement of comprehensive income by function of expense 70

    Appendix II Consolidated cash flow statement - direct method 71

    FormatThe references in the left-hand margin of the consolidated financial statements represent the paragraph of thestandards in which the disclosure appears - for example, `8p40 indicates IAS 8 paragraph 40. References toIFRSs, as opposed to IASs, appear in full - for example IFRS2p6 indicates IFRS 2 paragraph 6. Thedesignation DV (disclosure voluntary) indicates that the relevant IAS or IFRS encourages, but does notrequire, the disclosure. These consolidated financial statements also include additional disclosures that mayrepresent best practice. Additional notes and explanations are shown in footnotes.

    Amounts presented in brackets are negative amounts. Due to rounding, variations/differences may occur.

    AbbreviationsIFRS1p37 = International Financial Reporting Standard [number], paragraph number.

    7p22 = International Accounting Standards [number], paragraph number.

    SIC15p5 = Standing Interpretations Committee [number], paragraph number.

    DV = Disclosure Voluntary. Disclosure is encouraged but not required and thereforerepresents best practice.

    IFRIC = IFRS Interpretations Committee [number], paragraph number.

  • Illustrative IFRS consolidated financial statements 2015

    Investment property PwC 3

    IP Group consolidated financial statementsfor the year ended 31 December 2015

  • Illustrative IFRS consolidated financial statements 2015

    (All amounts in thousands unless otherwise stated)

    Investment property PwC 4

    Consolidated statement of financial position

    As at 31 December

    Note 2015 2014

    1p10(a), 1p54, 1p38, 1p68 Assets

    1p60, 1p66 Non-current assets

    1p54(b) Investment property 6 616,855 600,387

    1p54(a) Property, plant and equipment 7 132,788 103,178

    1p54(d), IFRS7p8(d) Available-for-sale financial assets 8 767 1,041

    1p55 Goodwill 9 1,599 496

    1p54(o), 1p56 Deferred income tax assets 10 933 750

    752,942 705,852

    1p60, 1p66 Current assets

    1p54(g) Inventories 11 15,917 -

    1p54(h) Trade receivables 12 3,742 5,885

    1p78(b), Operating lease pre-payments 13 6,844 6,958

    1p54(d), IFRS7p8(d) Available-for-sale financial assets 8 1,578 478

    1p54(d), IFRS7p8(a) Derivative financial instruments 14 1,464 1,196

    1p54(i), 7p8 Cash and cash equivalents 905 35,152

    30,450 49,669

    IFRS5p38, 1p54(j) Non-current assets classified as held-for-sale 15 989 5,421

    31,439 55,090

    Total assets 784,381 760,942

    Equity

    1p54(r) Equity attributable to equity holders of the company

    1p78(e) Share capital 16 62,720 62,720

    1p78(e) Other reserves 10,606 4,787

    Retained earnings 494,791 490,153

    Total equity 568,117 557,660

    Liabilities

    1p60, 1p69 Non-current liabilities

    1p54(m), IFRS7p8(f) Borrowings 17 107,224 102,804

    1p55 Tenant deposits 1,978 2,247

    1p54(o), 1p56 Deferred income tax liabilities 10 52,670 49,038

    161,872 154,089

    1p60, 1p69 Current liabilities

    1p54(k) Trade and other payables 18 45,562 36,083

    1p54(m), IFRS7p8(f) Borrowings 17 2,192 2,588

    1p55 Tenant deposits 590 608

    1p54(m), IFRS7p8(e) Derivative financial instruments 14 595 747

    1p54(n) Current income tax liabilities 10 4,735 4,392

    1p54(l) Provisions 19 550 1,601

    54,224 46,019

    IFRS5p38, 1p54(p) Liabilities directly associated with non-current assets classified as held

    for sale

    15 168 3,174

    Total liabilities 216,264 203,282

    Total equity and liabilities 784,381 760,942

  • Illustrative IFRS consolidated financial statements 2015

    (All amounts in thousands unless otherwise stated)

    Investment property PwC 5

    Commentary Consolidated statement of financial positionThe commentary that follows explains some of the key requirements in IAS 1, Presentation of

    financial statements, that impact the consolidated statement of financial position.

    1p10 1. IAS 1 refers to the balance sheet as the statement of financial position. However, this

    title is not mandatory; it is therefore admissible to retain the title of balance sheet.

    1p54, 55 2. Paragraph 54 of IAS 1 sets out the line items that are, as a minimum, req