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As IFRS continues to significantly shape how financial
statements are prepared and presented around the
world, the need for local and international market
participants to have reliable and transparent information
prepared following standardized accounting rules
makes it imperative for companies to have the right
tools and knowledge on hand to ensure their continued
compliance with their IFRS reporting obligations.
There are still a number of issues regarding these
tools and knowledge that need to be addressed by
the management, boardrooms, advisors and auditors
of today’s companies, and in our experience, the
accounting treatment of long-lived tangible assets
(LLTAs) is one area that has been steeped in controversy
in relation to the fair value measurement of these assets
and compliance with guidelines regarding tracking and
managing LLTA depreciation.
Measuring LLTA’s for financial reporting purposes poses
a significant challenge for companies and management
is tasked with deciding whether to measure the LLTA’s of
their organizations using their own resources or outside
specialists.
Having a broad view of this decision that considers all
of the relevant accounting standards and the particular
characteristics of the potential valuation specialist
provides management with a clear understanding of
its responsibilities both during and after the valuation
process, which is particularly important for valuations of
assets for financial reporting purposes.
The fair values of an entity’s LLTA’s are a key factor
for ensuring appropriate compliance with accounting
guidelines regarding the tracking and managing of the
depreciation of these assets, and for financial reporting
purposes as well. An effective LLTA valuation requires
technical knowledge and an understanding of the
applicable accounting standards
An outline of the LLTA valuation process is provided
subsequently:
VALUATIONSOF
TANGIBLEASSETSFORFINANCIAL
REPORTING PURPOSES
UNDER INTERNATIONAL
FINANCIAL REPORTING STANDARDS
By
ROBERTO CUARÓN IBARGÜENGOYTIA,
Member of the National Corporate Finance Technical Committee of IMEF,
Ing.
SAMUEL CAMPOS PAVÓN,
Senior -Transaction Advisory Services, EY México, article provided by IMEF, the Mexican
IAFEI Member Institute
MEXICO
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