IFRS 12 Aggregation of disclosures for investments

Aggregation of disclosures for investments

An entity shall decide, in the light of its circumstances, how much detail it provides to satisfy the information needs of users, how much emphasis it places on different aspects of the requirements and how it aggregates the information. It is necessary to strike a balance between burdening financial statements with excessive detail that may not assist users of financial statements and obscuring information as a result of too much aggregation.

Aggregation of similar entities

An entity may aggregate the disclosures required by IFRS 12 for interests in similar entities if aggregation is consistent with the disclosure objective and the requirement in the next paragraph and does not obscure the information provided. An entity shall disclose how it has aggregated its interests in similar entities.

An entity shall present information separately for interests in:

1. subsidiaries;
2. joint ventures;
3. joint operations;
4. associates; and
5. unconsolidated structured entities.

Judgement required

In determining whether to aggregate information, an entity shall consider quantitative and qualitative information about the different risk and return characteristics of each entity it is considering for aggregation and the significance of each such entity to the reporting entity. The entity shall present the disclosures in a manner that clearly explains to users of financial statements the nature and extent of its interests in those other entities.

Examples of aggregation levels within the classes of entities that might be appropriate are:

1. nature of activities (a research and development entity, a revolving credit card securitisation entity).
2. industry classification.
3. geography (country or region).