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Answer :
MFRS 116, which stands for Malaysian Financial Reporting Standard 116, outlines the financial statement disclosure requirements for each class of property, plant, and equipment. These requirements include information about measurement, recognition, depreciation, impairment, and disposal of property, plant, and equipment.
MFRS 116 sets out specific disclosure requirements related to property, plant, and equipment in financial statements. These requirements aim to provide users of the financial statements with relevant information about the entity's investment in and utilization of these assets. The key disclosure requirements stipulated by MFRS 116 for each class of property, plant, and equipment are as follows:
1. Measurement Basis: The financial statements should disclose the measurement basis used for determining the carrying amount of property, plant, and equipment. This could include historical cost, revaluation model, or fair value model.
2. Depreciation Method: The financial statements should disclose the depreciation method applied to each class of property, plant, and equipment. This includes the useful lives or depreciation rates used for calculating depreciation expenses.
3. Depreciation Expense: The financial statements should disclose the depreciation expense recognized during the reporting period for each class of property, plant, and equipment.
4. Revaluation: If an entity chooses to revalue its property, plant, and equipment, the financial statements should disclose the methods, assumptions, and significant estimates used in the revaluation process.
5. Impairment: The financial statements should disclose any indicators of impairment, along with details of impairment losses recognized, reversed, or written off during the reporting period for each class of property, plant, and equipment.
6. Disposals: The financial statements should disclose any significant disposals of property, plant, and equipment during the reporting period, including the gain or loss recognized on disposal.
7. Restrictions on Title: If there are any restrictions on the title of property, plant, and equipment, such as assets held under finance leases, the financial statements should disclose these restrictions and their impact on the entity's financial position.
These disclosure requirements ensure that users of the financial statements have sufficient information to understand the carrying amount, depreciation, impairments, and disposals of property, plant, and equipment, thereby enabling them to make informed decisions regarding the entity's financial performance and position.
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