2013-10-10 New Disclosures in 2013 Annual Financial Statements

2013 has been a challenging accounting year for many Canadian public companies preparing IFRS financial statements, considering the number of major new or amended IFRS that were effective at the beginning of the year - consolidations, joint arrangements, employee benefits and fair value measurement being the main ones. For the most part that challenge has been met in interim financial statements. However, one element remains - reflecting the new disclosures that these standards require in 2013 annual financial statements. Depending on a company’s particular facts and circumstances, the changes from prior years can be significant.

These standards signal a new approach to disclosure - establishing general disclosure objectives that companies must now meet. This new approach is in reaction to criticism that financial statement disclosure suffers too often from “checklist” approaches that clutter and obscure the financial statements and, at the same time, leave important information unsaid. Broadly speaking, those objectives require management to consider whether, as the result of complying with the minimum disclosure requirements of a standard, users of financial statements have the information that enables them to evaluate the nature and risks of the item that is the subject of the standard and its effects on the company’s financial position, performance and cash flows. If not, companies must provide additional information. Also, in some cases, companies have been given more latitude about deciding the nature and detail of the information to provide in complying with minimum disclosure requirements. As a result, determinations about the adequacy of disclosures have become much more a matter of judgment than in the past, and may require more involvement by senior management.

We have prepared a series of illustrative disclosures to assist companies in understanding and applying the new requirements. Each newsletter in the series addresses one of the new or amended standards. The newsletters are:

Disclosing Fair Values in Annual Financial Statements – Applying IFRS 13 (446 KB)
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Disclosing Fair Values in Annual Financial Statements – Applying IFRS 13 to Investment Properties (A supplement) (304 KB)
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Offsetting of Financial Instruments – Disclosure in 2013 Annual Financial Statements (240 KB)
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Disclosing Employee Benefits in 2013 Annual Financial Statements (329 KB)
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Disclosing Interests in Other Entities in 2013 Annual Financial Statements – Applying IFRS 12 (1.15 MB)
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