VALUE IFRS Plc

1 VALUE IFRS PlcIllustrative IFRS consolidated financial statements December This publication presents the sample annual financial reports of a fictional listed company, VALUE IFRS Plc. It illustrates the financial reporting requirements that would apply to such a company under International Financial Reporting Standards as issued at 30 June 2021. Supporting commentary is also provided. For the purposes of this publication, VALUE IFRS Plc is listed on a fictive Stock Exchange and is the parent entity in a consolidated entity. VALUE IFRS Plc 2021 is for illustrative purposes only and should be used in conjunction with the relevant financial reporting standards and any other reporting pronouncements and legislation applicable in specific jurisdictions.

2 Global Accounting Consulting Services PricewaterhouseCoopers LLP About PwC With offices in 155 countries and more than 284,000 people, we are among the leading professional services networks in the world. We help organisations and individuals create the VALUE they re looking for, by delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at PwC 2 Notes to the financial statements 27 Significant changes in the current reporting period 29 Further details 165 Related party transactions 166 Share-based payments 170 Earnings per share 175 Offsetting financial assets and financial liabilities 178 Assets pledged as security 180 Summary of significant accounting policies 181 Changes in accounting policies 198 Unrecognised items 160 Contingent liabilities and contingent assets 161 Commitments 162 Events

3 Occurring after the reporting period 162 Group structure 146 Business combination 147 Discontinued operation 150 Interests in other entities 153 Risk 117 Critical estimates, judgements and errors 118 Financial risk management 122 Capital management 143 How numbers are calculated 31 Segment information 32 Profit and loss 37 Balance sheet 53 Cash flow information 114 VALUE IFRS Plc illustrative IFRS consolidated financial statements December 2021 Financial statements 6 Statement of profit or loss 9 Statement of comprehensive income 10 Balance sheet 17 Statement of changes in equity 21 Statement of cash flows 24 Appendices 201 Independent auditor's report 200 PwC 3 Introduction This

4 Publication presents illustrative consolidated financial statements for a fictitious listed company, VALUE IFRS Plc. The financial statements comply with International Financial Reporting Standards (IFRS) as issued at 30 June 2021 and that apply to financial years commencing on or after 1 January 2021. We have attempted to create a realistic set of financial statements for VALUE IFRS Plc, a corporate entity that manufactures goods, provides services and holds investment property. However, as this publication is a reference tool, we have not removed any disclosures based on materiality.

5 Instead, we have included illustrative disclosures for as many common scenarios as possible. Please note that the amounts disclosed in this publication are purely for illustrative purposes and may not be consistent throughout the publication. New disclosure requirements and changes in accounting policies There were no changes to the financial reporting requirements this year that affected the disclosures in our example financial statements. However, noting the increased use of supplier financing (or reverse factoring) and the agenda decision issued by the IFRS Interpretations Committee (IC) last year, we have added illustrative disclosures for such an arrangement to note 7(f).

6 We have also made a number of smaller improvements to some of the other disclosures, including moving lease accounting policies that are not entity-specific from note 8(b) to note 25(h). At the time of writing, the biggest impact on the financial statements of entities all around the world continues to be related to the COVID-19 pandemic, and the impairment of assets, including receivables, information about going concern and borrowing profiles will likely still be a focus of stakeholders as at 31 December 2021. Entities will need consider to what extent they need to explain the impact on their business and the key assumptions made.

7 However, as the impact will differ from entity to entity, we are referring our readers to our dedicated web site, which provides many useful resources, including certain disclosure examples, and continues to be updated to reflect latest developments. This website also discusses the accounting for COVID-19-related rent concessions by both lessees and lessors. We have therefore not illustrated any related disclosures in this publication. Our fact pattern further assumes that VALUE IFRS Plc will not be affected by interest rate benchmark reform.

8 However, entities with hedging relationships and entities that have exposure to interest rates where (i) the interest rates are dependent on interbank offered rates (IBORs), and (ii) these IBORs are subject to interest rate benchmark reform may need to explain the changes to their accounting policies arising from the adoption of the Interest Rate Benchmark Reform Phase 2 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Leases. These entities may also need to provide additional disclosures, including information about risks arising from IBOR reform, how the entity manages transition to the alternative benchmark rate(s) and quantitative information about derivatives and non-derivatives that have yet to transition.

9 Our Practical guide to Phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 for interest rate benchmark (IBOR) reform includes example disclosures which illustrate both phase 1 and phase 2 amendments to IFRS 7 for a cash flow hedge and other financial instruments typical of a corporate entity which applies IFRS 9 to its hedge accounting relationships. There were no other amendments to standards that apply from 1 January 2021, see Appendix D, and we have therefore not disclosed any changes in accounting policies in this publication.

10 However, if an entity did change its accounting policies as a result of the amendments made in relation to COVID-19-related rent concessions and IBOR Phase 2 and the change had a material impact on the reported amounts, this would need to be appropriately disclosed. Disclosing climate-related risks in the financial statements Climate-related risks could have a significant impact on an entity s operations and financial performance and users of the financial statements are increasingly looking for evidence that the entity has incorporated climate risk factors when making estimates and judgements in the preparation of financial statements.