8.4 Investments Disclosures
Reporting disclosures were addressed under each accounting method above. To summarize, investments will be reported as either current or long-term assets on the same basis as other assets. If the investment is expected to be sold within twelve months of the balance sheet date (or its operating cycle), is held for trading purposes, or is a cash equivalent, it will be reported as a current asset. All other investments will be reported as long-term assets. Both IFRS and ASPE companies are similar regarding this classification. IFRS and ASPE standards are also similar regarding the disclosure objectives for investments for the following reasons:
- to ensure that information is available to assess the level of significance of the overall financial position and performance of the investments
- to understand the nature and extent of risks arising from the investments
- to know how these risks are managed
Examples of disclosure details are:
- separation of investments by type (i.e., FVNI, AC, FVOCI, Significant Influence, Subsidiary, Joint arrangements)
- the carrying value of investments with details about their respective fair values including valuation techniques, interest income, unrealized and realized gains (losses), impairments and reversals of impairments, and reclassifications
- information from the legal documents including maturity dates, interest rates, and collateral
- information regarding market risk, liquidity risk, and credit risk, as well as the policies in place to manage risks
- IFRS for impaired assets must disclose the basis for the ECL and changes in ECL as well as a breakdown and reconciliation of the reporting year’s adjustments of any impairment allowance accounts
Since investments are also financial instruments, the disclosure requirements identified in Chapter 6: Cash and Receivables apply to intercorporate investments as well. Refer to that chapter for more details.
