University of Luzon

COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

A Comparison of Full PFRS, PFRS for SMEs, And PFRS for SEs
PAS 16: Property, Plant, And Equipment

Presented to The Faculty Head of Accountancy Department

University of Luzon
Perez Blvd. Dagupan City, Pangasinan

In Partial Fulfillment of the Requirement in RES41

Accounting Research

Submitted by:
Hepiga, Daniel R.
Monforte, Mark Justin P.
Correa, Jamica A.
Eden, Francis Ian J.
Siapno, Mikee
Ramos, Monica L.
Vallo, Denver John B.

Submitted to:
Dean Renante D. Balocating, CPA, MBA
Professor

Group VII
2023
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City
INTRODUCTION

PAS 16: PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment (PPE) are tangible items that:

A. are held for use in the production or supply of goods or services, for
rental to others, or for administrative purposes; (for example: land,
buildings, and machinery) and
B. are expected to be used during more than one period (long-term
assets that are used in the operations of the business)
(IAS 16 paragraph 6)

Property, plant and equipment does not include:

A. biological assets related to agricultural activity (see Section 34
Specialized Activities); or
B. mineral rights and mineral reserves, such as oil, natural gas and
similar non-regenerative resources.
(IFRS for SMEs Section 17.3)

PPE is crucial aspects of a company’s operations, as it can affect the

company’s profitability and competitiveness. According to study published
in the Journal of Accounting and Public Policy, PPE is a significant
component of a company’s balance sheet, and its accurate reporting is
essential for investors and other stakeholders. Another study published in
the International Journal of Economics and Financial Issues found that
the proper accounting for PPE can improve a company’s financial
performance and decision-making. The value of PPE is typically recorded
on the balance sheet, and any changes in the value of PPE over time are
reported in the income statement.

International Accounting Standards 16 (IAS 16) is an International

Financial Standards (IFRS) issued by the International Accounting
Standards Board (IASB). IAS 16 specifies the accounting treatment for
property, plant and equipment (PPE) on a company’s balance sheet. IAS
16 also provides guidance on how to determine the cost of an asset, how
to recognize and measure any depreciation or impairment of the asset,
and how to present and disclose information about the assets in the
financial statements. IAS 16 is intended to improve the comparability and
consistency of financial statements across different entities and
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City
industries, and to provide users of financial statements with relevant and
reliable information about a company’s PPE.
This research paper is comparison of Financial Reporting Standards for
PPE and is composed of:
 Full PFRS;
 PFRS for SMEs; and
 PFRS for SEs.
The term ‘financial reporting’ encompasses general purpose financial
statements plus other financial reporting. (IFRS for SMEs Section 16-P5)

Full IFRS sets out recognition, measurement, presentation and disclosure

requirements dealing with transactions and events that are important in
general purpose financial statements. They may also set out such
requirements for transactions, events and conditions that arise mainly in
specific industries. (IFRS for SMEs Section 16-P6)

The IASB develops and issues a separate Standard intended to apply to

the general-purpose financial statements of, and other financial reporting
by, entities that in many countries are referred to by a variety of terms,
including small and medium-sized entities (SMEs), private entities and
non-publicly accountable entities. (IFRS for SMEs Section 16-P9)

That Standard is the International Financial Reporting Standard for Small

and Medium-sized Entities (IFRS for SMEs). The IFRS for SMEs is based
on full IFRS with modifications to reflect the needs of users of SMEs’
financial statements and cost-benefit considerations. (IFRS for SMEs
Section 16-P9)
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City
RESULTS

PAS 16: PROPERTY, PLANT AND EQUIPMENT

RECOGNITION
PFRS FOR SMEs
(SMALL AND PFRS FOR SEs
FULL PFRS
MEDIUM-SIZED (SMALL ENTITIES)
ENTITIES)

1. The cost of an item of property, plant and equipment shall be

recognised as an asset if, and only if:

a. It is probable that future economic benefits associated with the

item will flow to the entity; and
b. The cost of the item can be measured reliably.

2. Items such as spare parts, stand-by equipment and servicing

equipment are recognised in accordance with this IFRS when they
meet the definition of Property, plant and equipment. Otherwise,
such items are classified as Inventory.

(for PFRS for SMEs and SEs)

Land and buildings are separable assets, and an
entity shall account for them separately, even
when they are acquired together.

(only included in Full PFRS)

3. This Standard does not prescribe the unit of measure for

recognition, i.e. what constitutes an item of property, plant and
equipment. Thus, judgement is required in applying the
recognition criteria to an entity’s specific circumstances. It may be
appropriate to aggregate individually insignificant items, such as
moulds, tools and dies, and to apply the criteria to the aggregate
value.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City
4. An entity evaluates under this recognition principle all its
property, plant and Equipment costs at the time they are incurred.
These costs include costs incurred initially to acquire or construct
an item of property, plant and equipment and costs incurred
subsequently to add to, replace part of, or service it. The cost of
an item of property, plant and equipment may include costs
incurred relating to leases of assets that are used to construct,
add to, replace parto or service an item of property, plant and
equipment, such as depreciation of right-of-use assets.

(only included in PFRS for SMEs)

3. Parts of some items of property, plant and equipment may require
replacement at regular intervals (for example, the roof of a
building). An entity shall add to the carrying amount of an item of
property, plant and equipment the cost of replacing part of such
an item when that cost is incurred if the replacement part is
expected to provide incremental future benefits to the entity. The
carrying amount of those parts that are replaced is derecognised.
If it is not practicable for an entity to determine the carrying
amount of the replaced part, the entity may use the cost of the
replacement as an indication of what the cost of the replaced part
was at the time it was acquired or constructed.
4. A condition of continuing to operate an item of property, plant and
equipment (for example, a bus) may be performing regular major
inspections for faults regardless of whether parts of the item are
replaced. When each major inspection is performed, its cost is
recognised in the carrying amount of the item of property, plant
and equipment as a replacement if the recognition criteria are
satisfied. Any remaining carrying amount of the cost of the
previous major inspection (as distinct from physical parts) is
derecognised. This is done regardless of whether the cost of the
previous major inspection was identified in the transaction in
which the item was acquired or constructed. If necessary, the
estimated cost of a future similar inspection may be used as an
indication of what the cost of the existing inspection component
was when the item was acquired or constructed.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

MEASUREMENT
PFRS FOR SMEs
(SMALL AND PFRS FOR SEs
FULL PFRS
MEDIUM-SIZED (SMALL ENTITIES)
ENTITIES)
Measurement at recognition

Each is measured at COST

Elements of cost (for Full PFRS, PFRS for SMEs and SEs)

1. Cost of an item of property, plant and equipment are

composed of:

a. purchase price
- import duties;
- non-refundable taxes, after trade discounts and rebate are
deducted; and
- legal and brokerage fees (for SMEs and SEs)
b. cost directly attributable in:
- bringing the asset to the location; and
- condition necessary for it to be capable of operating in the
manner intended by management which includes:
(costs of site preparation, initial delivery and handling
installation and assembly and testing of functionality)
c. initial estimate of the costs of; (for Full and SMEs only)
- dismantling and removing the item and restoring the site
on which it is located; and
- the obligation for which an entity incurs either when the
item is acquired or as a consequence of having used the
item during a particular period for purposes other than to
produce inventories during that period.

2. examples of DIRECTLY ATTRIBUTABLE COST are:

a. cost of employee benefits;
b costs of site preparation;
c. initial delivery and handling costs;
d. installation and assembly costs;
e. costs of testing whether the asset is functioning properly
f. professional fees.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

4. Examples of costs that are not costs of an item of property,

plant and equipment are:

. a. costs of opening a new facility;

b. costs of introducing a new product or service
c. costs of conducting business in a new location or with a
new class of customer (including costs of staff training);
d. administration and other general overhead costs; and
e. borrowing costs. (for SMEs)

7. The income and related expenses of incidental operations

during construction or development of an item of property, plant
and equipment are recognized in profit or loss if those
operations are not necessary to bring the item to its intended
location and operating condition.

Elements of cost (only included in Full PFRS)

3. An entity applies IAS 2 Inventories; - The obligations for costs

accounted for in accordance with IAS 2 or IAS 16 are recognized
and measured in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets.

5. Recognition of costs in the carrying amount of an item of

property, plant and equipment ceases when the item is in the
location and condition necessary for it to be capable of
operating in the manner intended by management.

6. An entity recognizes the proceeds from selling any such items,

and the cost of those items, in profit or loss in accordance with
applicable Standards.

8. Any internal profits are eliminated in arriving at such costs.

Similarly, the cost of abnormal amounts of wasted material,
labor, or other resources incurred in self-constructing an asset
is not included in the cost of the asset.

9. Bearer plants are accounted for in the same way as self-

constructed items of property, plant and equipment before they
are in the location and condition necessary to be capable of
operating in the manner intended by management.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

Measurement of cost

The cost of an item of property, plant and equipment is the cash

price equivalent at the recognition date.

Note: If payment is deferred beyond normal credit terms, the cost

is the present value of all future payments.

Exchanges of assets

An item of property, plant or equipment may be acquired in

exchange for a non-monetary asset, or assets, or a combination of
monetary and non-monetary assets. An entity shall measure the
cost of the acquired asset at fair value unless

a. the exchange transaction lacks commercial substance or

b. the fair value of neither the asset received nor the asset given
up is reliably measurable.

Note: The acquired item is measured in this way even if an entity

cannot immediately derecognize the asset given up. If the acquired
item is not measured at fair value, its cost is measured at the
carrying amount of the asset given up.

An exchange transaction has commercial substance if:

a. the configuration (risk, timing and amount) of the cash flows of

the asset received differs from the configuration of the cash flows
of the asset transferred; or
b. the entity-specific value of the portion of the entity’s operations
affected by the transaction changes as a result of the exchange;
and
c. the difference in (a) or (b) is significant relative to the fair value
of the assets exchanged.

The fair value of an asset is reliably measurable if:

a. the variability in the range of reasonable fair value

measurements is not significant for that asset or
b. the probabilities of the various estimates within the range can
be reasonably assessed and used when measuring fair value.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

Measurement after recognition

An entity shall choose either the cost model in paragraph or the

revaluation model in paragraph as its accounting policy and shall
apply that policy to an entire class of property, plant and
equipment.

Note:

An entity shall apply the cost model to investment property whose

fair value cannot be measured reliably without undue cost or effort.

An entity shall recognize the costs of day-to-day servicing of an item

of property, plant and equipment in profit or loss in the period in
which the costs are incurred

Cost model

An entity shall measure an item of property, plant and equipment

after initial recognition at cost less any accumulated depreciation
and any accumulated impairment losses.

Revaluation model
FULL PFRS & PFRS FOR SMEs PFRS FOR SEs

FAIR VALUE MODEL

An entity shall measure an item of property, An entity shall measure

plant and equipment whose fair value can be an item of property,
measured reliably at a revalued amount, being plant and equipment at
its fair value at the date of the revaluation fair value at each
less any subsequent accumulated reporting date with
depreciation and subsequent accumulated changes in fair value
impairment losses. recognized in profit or
loss.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

Depreciation
PFRS FOR SMEs
(SMALL AND PFRS FOR SEs
FULL PFRS
MEDIUM-SIZED (SMALL ENTITIES)
ENTITIES)
(only included in Full PFRS)

Each part of an item of property, plant and equipment with a cost

that is significant in relation to the total cost of the item shall be
depreciated separately.

An item of property, plant and equipment to its significant parts

and depreciates separately each such part.

A significant part of an item may have a useful life and a

depreciation method that are the same as the useful life and the
depreciation method of another significant part of that same item
parts may be grouped in determining the depreciation charge.

(only included in PFRS for SMEs)

An item of property, plant and equipment have significantly

different patterns of consumption of economic benefits.

An entity shall allocate the initial cost of the asset to its major
components and depreciate each such component separately over
its useful life.

Other assets shall be depreciated over their useful lives as a single

asset

(for Full PFRS, PFRS for SMEs and SEs)

The depreciation charge for each period shall be recognized in

profit or loss unless another section of this Standard requires the
cost to be recognized as part of the cost of an asset.

For example, the depreciation of manufacturing property, plant and

equipment is included in the costs of inventories (see Section 13
Inventories).
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

Depreciable amount and Depreciation table

The depreciable amount of an asset shall be allocated on a

systematic basis over its useful life.

 The residual value and the useful life of an asset are reviewed
at least at each annual reporting date (*if there is an
indication of change since the last reporting date) and
amended if expectations differ from previous estimates.

PFRS for SMEs*

 Depreciation of an asset begins when it is available for use, ie

when it is in the location and condition necessary for it to be
capable of operating in the manner intended by management.

 Depreciation of an asset ceases at the earlier of the date that

the asset is classified as held for sale (or included in a disposal
group that is classified as held for sale) in accordance with IFRS
5 and the date that the asset is derecognised. Therefore,
depreciation does not cease when the asset becomes idle or is
retired from active use unless the asset is fully depreciated.
However, under usage methods of depreciation the
depreciation charge can be zero while there is no production.

 An entity shall consider all the following factors in determining

the useful life of an asset:

a. expected usage of the asset

b. expected physical wear and tear,
c. technical or commercial obsolescence arising from changes
or improvements in production, or from a change in the
market demand for the product or service output of the
asset.
d. legal or similar limits on the use of the asset, such as the
expiry dates of related leases.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

Depreciation method

(only included in Full PFRS)

The depreciation method used shall reflect the pattern in which

the asset’s future economic benefits are expected to be
consumed by the entity. The depreciation method applied to an
asset shall be reviewed at least at each financial year-end
and, if there has been a significant change in the expected
pattern of consumption of the future economic benefits embodied in
the asset, the method shall be changed to reflect the changed
pattern.

(for PFRS for SMEs and SEs)

An entity shall select a depreciation method that reflects the

pattern in which it expects to consume the asset’s future
economic benefits. If there is an indication that there has
been a significant change the last annual reporting date in the
pattern by which an entity expects to consume an asset’s future
economic benefits, the entity shall review its present
depreciation method and, if current expectations differ,
change the depreciation method to reflect the new pattern.

(for Full PFRS, PFRS for SMEs and SEs)

An entity shall select a depreciation method that reflects the pattern

in which it expects to consume the asset’s future economic benefits.
The possible depreciation methods used:

a. the straight-line method;

b. the diminishing balance method; and
c. the units of production method.

Impairment
(for Full PFRS and PFRS for SMEs)

An entity shall apply IAS 36 Impairment of Assets to

determine whether an item of PPE is impaired. This standard
explains how an entity reviews the carrying amount of its assets,
how it determines the recoverable amount of an asset, and when it
recognizes or reverses the recognition of an impairment loss.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

Compensation from third parties for items of property, plant and

equipment that were impaired, lost or given up shall be included
in profit or loss when the compensation becomes receivable.
(only included in Full PFRS)

Impairments or losses of items of PPE or payments of

compensation from third parties and any subsequent purchase or
construction of replacement assets are separate economic events
and are accounted for separately as follows:

a. impairments of items of PPE are recognized in accordance with

IAS 36;
b. derecognition of items of PPE that were retired or disposed of is
determined in accordance with this Standard;
c. compensation from third parties for items of PPE that were
impaired, lost or given up is included in determining profit or
loss when it becomes receivable; and
d. the cost of items of PPE restored, purchased or constructed as
replacements is determined in accordance with this Standard.

(only included in PFRS for SMEs)

IAS 36 Impairment of Assets states that a plan to dispose of an

asset before the previously expected date is an indicator of
impairment that triggers the calculation of the asset’s recoverable
amount for the purpose of determining whether the asset is
impaired.

Derecognition

An entity shall derecognize an item of property, plant and

equipment:

a. on disposal; or
b. when no future economic benefits are expected from its use or
disposal.

The gain or loss arising from the derecognition of an item of

property, plant and equipment shall be determined as the
difference between the net disposal proceeds, if any, and the
carrying amount of the item.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

DISCLOSURE
PFRS FOR SMEs
(SMALL AND PFRS FOR SEs
FULL PFRS
MEDIUM-SIZED (SMALL ENTITIES)
ENTITIES)

(I) The financial statements shall disclose, for each class of

property, plant and equipment:

a) the measurement bases used to calculate the gross carrying

capacity amount;
b) the methods of depreciation employed or used;
c) the useful lives or depreciation rates used;
d) the gross carrying amount and depreciation accumulated
(aggregated with accumulated impairment losses) at the start and
end of the reporting period; and
e) a reconciliation of the carrying amount at the beginning and end
of the period showing:
i. additions;
ii. assets classified as held for sale or included in an IFRS 5
disposal group classified as held for sale, as well as other
disposals
iii. acquisitions through business combinations;
iv. increases or decreases due to revaluations under
paragraphs 31, 39 and 40 as well as impairment losses
recognised or reversed in other comprehensive income in
accordance with IAS 36;
v. impairment losses recognized in profit or loss under IAS 36;
vi. reversal of impairment losses in profit or loss in accordance
with IAS 36;
vii. depreciation;
viii. the net exchange differences resulting from the translation
of the financial statements converted from functional
currency to a various presentation currency, including
translation of a foreign transaction into the presentation
currency of the reporting entity (which the PFRS SMEs and
PFRS SE don’t need or have to.); and
ix. Other modifications or changes.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

(II) The financial statements must also disclose the following:

a) the existence and carrying amounts of property, plant, and
equipment over which the entity has restricted title or is
pledged as security for liabilities;
b) the amount of expenditures recognized in the carrying amount
of
c) an item of property, plant and equipment in the course of its
(which the PFRS SMEs and PFRS SE don’t need or have to.); and
d) the amount of contractual commitments for the acquisition of
property, plant and equipment.

(III) If not presented separately in the statement of comprehensive

income, the financial statements shall also disclose:
a) the amount of compensation from third parties for items of
property, plant and equipment that were impaired, lost or given
up that is included in profit or loss; and
b) the amounts of proceeds and cost included in profit or loss in
accordance with paragraph 20A that relate to items produced
that are not an output of the entity’s ordinary activities, and
which line item(s) in the statement of comprehensive income
include(s) such proceeds and cost.

(IV) Selection of the depreciation method and estimation of the

useful life of assets are matters of judgement. Therefore,
disclosure of the methods adopted and the estimated useful
lives or depreciation rates provides users of financial
statements with information that allows them to review the
policies selected by management and enables comparisons
to be made with other entities. For similar reasons, it is
necessary to disclose:
a) depreciation, whether recognised in profit or loss or as a part
of the cost of other assets, during a period; and
b) accumulated depreciation at the end of the period.
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

(V) In accordance with IAS 8 an entity discloses the nature and

effect of a change in an accounting estimate that has an effect
in the current period or is expected to have an effect in
subsequent periods. For property, plant and equipment, such
disclosure may arise from changes in estimates with respect to:

(VI) If items of property, plant and equipment are stated at revalued

amounts, the following shall be disclosed in addition to the
disclosures required by IFRS 13 Fair Value Measurement:
a) the effective date of the revaluation;
b) whether an independent valuer was involved;
c) for each revalued class of property, plant and equipment, the
carrying amount that would have been recognised had the
assets been carried under the cost model; and
d) the revaluation surplus, indicating the change for the period
and any restrictions on the distribution of the balance to
shareholders.

(VII) In accordance with IAS 36 an entity discloses information on

impaired property, plant and equipment. In addition to the
information required by paragraph 73(e)(iv)–(vi).

Paragraph 73(e)(iv)–(vi):
(iv) increases or decreases resulting from revaluations and
from impairment losses recognised or reversed in other
comprehensive income in accordance with IAS 36;
(v) impairment losses recognised in profit or loss in
accordance with IAS 36;
(vi) impairment losses reversed in profit or loss in
accordance with IAS 36;

(VIII) Users of financial statements may also find the following

information relevant to their needs:
a) the carrying amount of temporarily idle property, plant and
equipment;
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City
b) the gross carrying amount of any fully depreciated property,
plant and equipment that is still in use;
c) the carrying amount of property, plant and equipment retired
from active use and not classified as held for sale in accordance
with IFRS 5; and
d) when the cost model is used, the fair value of property, plant
and equipment when this is materially different from the
carrying amount. Therefore, entities are encouraged to disclose
these amounts.

(only included in PFRS for SMEs)

(I) The financial statements shall disclose, for each class of property,
plant and equipment:
a) the measurement bases used to calculate the gross carrying
capacity amount;
b) the methods of depreciation employed or used;
c) the useful lives or depreciation rates used;
d) the gross carrying amount and depreciation accumulated
(aggregated with accumulated
impairment losses) at the start and end of the reporting period;
and
e) a reconciliation of the carrying amount at the beginning and end
of the period showing:
i. additions;
ii. disposals;
iii. acquisitions through business combinations
iv. increases or decreases resulting from revaluations and from
impairment losses recognised or reversed in other
comprehensive income in accordance with Section 27;
v. transfers to and from investment property carried at fair
value through profit or loss
vi. impairment losses recognised or reversed in profit or loss in
accordance with Section 27;
vii. depreciation; and
viii. other changes.

This reconciliation need not be presented for prior periods.

*Same as the Full PFRS except that PFRS for SMEs shall disclose the
“transfers to and from investment property carried at fair value through
profit or loss” (which the Full PFRS and PFRS SE don’t need or have to.)
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

(II) An entity shall also disclose the following:

a) the existence and carrying amounts of property, plant and
equipment to which the entity has restricted title or that is pledged
as security for liabilities;
b) the amount of contractual commitments for the acquisition of
property, plant and equipment; and
c) if an entity has investment property whose fair value cannot be
measured reliably without undue cost or effort it shall disclose
that fact and the reasons why fair value measurement would
involve undue cost or effort for those items of investment property.

*The difference between Full PFRS and PFRS for SME’s is that, if an entity
owns investment property whose fair market value cannot be determined
or measured reliably without undue cost or effort, it shall disclose that fact
as well as the reasons why fair value measurement would involve undue
cost or effort for those items of investment property. (Which the Full PFRS
and PFRS SE don’t need or have to.)

(III) If items of property, plant and equipment are stated at revalued

amounts, an entity shall disclose the following:
a) the effective date of the revaluation;
b) whether an independent valuer was involved;
c) the methods and significant assumptions applied in estimating
the items’ fair values;
d) for each revalued class of property, plant and equipment, the
carrying amount that would have been recognised had the assets
been carried under the cost model; and
e) the revaluation surplus, indicating the change for the period and
any restrictions on the distribution of the balance to shareholders.

*In addition, PFRS for SMEs has an additional disclosure which states
that the methods and significant assumptions applied in estimating the
items’ fair values. (Same as the PFRS for SE).

(only included in PFRS for SEs)

I) Entities applying the cost model shall disclose the following for each
class of property, plant and equipment:
a) the depreciation methods used;
b) the useful lives or the depreciation rates used;
c) the gross carrying amount and the accumulated depreciation
(aggregated with accumulated impairment losses) at the beginning
and end of the reporting period; and
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City
d) a reconciliation of the carrying amount at the beginning and the
end of the reporting period showing separately:
i. additions;
ii. disposals;
iii. acquisitions through business combinations;
iv. impairment losses recognized or reversed in profit or loss;
v. depreciation;
vi. other changes.

This reconciliation need not be presented for prior periods

*The PFRS applied to Small Enterprises is also the same with Full PFRS
and PFRS for SME’s
Except that PFRS for SE does not need to disclose the following:

(i) Measurement bases used for determining the gross carrying

amount. (from Full PFRS and PFRS for SMEs)
(ii) increases or decreases resulting from revaluations under
paragraphs 17.15B–17.15D and from impairment losses
recognised or reversed in other comprehensive income in
accordance with Section 27 or Impairment of Assets (from Full
PFRS and PFRS for SMEs)
(iii) transfers to and from investment property carried at fair
value through profit or loss (from PFRS for SMEs)

(II) The entity shall also disclose the existence and carrying amounts of
property, plant and equipment to which the entity has restricted title or
that is pledged as security for liabilities.

*In the PFRS for SE, it only considers to disclose the existence and carrying
amounts of property, plant, and equipment over which the entity has
restricted title or is pledged as security for liabilities.

PFRS SE does not need to disclose the following:

(i) the amount of expenditures recognized in the carrying amount of
an item of property, plant and equipment in the course of its
construction; (From Full PFRS) and
(ii) the amount of contractual commitments for the acquisition of
property, plant and equipment. (From Full PFRS and PFRS for
SMEs)
if an entity owns investment property whose fair market value cannot be
determined or measured reliably without undue cost or effort, it shall
disclose that fact as well as the reasons why fair value measurement
would involve undue cost or effort for those items of investment property.
(From PFRS for SMEs)
 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City

III) Entities applying the fair value model shall disclose the following:
a) whether an independent valuer was involved;
b) the methods and significant assumptions applied in determining
the fair value of investment property;
c) for each class of property, plant and equipment, the carrying
amount that would have been recognized had the assets been
carried under the cost model; and
d) a reconciliation between the carrying amounts of property, plant
and equipment at the beginning and end of the period, showing
separately:
i. additions, disclosing separately those additions resulting
from acquisitions through business combinations;
ii. net gains or losses from fair value adjustments;
iii. transfers to cost model when a reliable measure of fair
value is no longer available without undue cost or effort
(see paragraph 230); iv)
iv. transfers to and from inventories and investment
property.
v. other changes.

This reconciliation need not be presented for prior periods

*The PFRS for Small and Medium-sized Entities is also the same with the
PFRS for SE’s.

Except that PFRS for SE does not require to disclose “the effective date of
the revaluation”. And it has an additional disclosure about a reconciliation
between the carrying amounts of property, plant and equipment at the
beginning and end of the period, showing separately:
i) additions, disclosing separately those additions resulting from
acquisitions through business combinations;
ii) net gains or losses from fair value adjustments;
iii) transfers to cost model when a reliable measure of fair value is
no longer available without undue cost or effort (see paragraph
230);
iv) transfers to and from inventories and investment property.
v) other changes.

This reconciliation does not need to be presented for prior period

 University of Luzon
COLLEGE OF ACCOUNTANCY
Perez Boulevard, Dagupan City
References

Full PFRS
https://www.ifrs.org/content/dam/ifrs/publications/pdf-
standards/english/2022/issued/part-a/ias-16-property-plant-and-
equipment.pdf?bypass=on

PFRS for SMEs

https://www.ifrs.org/content/dam/ifrs/publications/ifrs-for-
smes/english/2015/ifrs-for-smes-standard-part-a.pdf?bypass=on

PFRS for SE
https://www.pfrsc.org/wp-
content/themes/financialreportca453/pdf/PFRS-for-Small-Entities-the-
framework.pdf