Last reviewed: July 2026.
IAS 16 disclosures explain how property, plant and equipment are measured, depreciated and changed during the reporting period. A single closing balance is not enough for users to understand additions, disposals, depreciation, impairment, revaluation and restrictions.
Disclosure should be prepared by material class of property, plant and equipment and reconciled to the general ledger and fixed asset register.
Core IAS 16 disclosure checklist
| Disclosure | What to report | Evidence source |
|---|---|---|
| Measurement bases | Cost model or revaluation model by class | Accounting policy and valuation records |
| Depreciation | Methods and useful lives or rates | Fixed asset register |
| Gross and accumulated amounts | Opening and closing gross carrying amount and accumulated depreciation/impairment | Ledger and register |
| Carrying amount reconciliation | Additions, disposals, depreciation, impairment, revaluation and other movements | Movement schedule |
| Restrictions and pledges | Title restrictions and assets pledged as security | Legal and financing records |
| Capital commitments | Contractual commitments to acquire PPE | Approved contracts and purchase orders |
Classes of property, plant and equipment
Disclosures are normally organised by classes such as land, buildings, machinery, vehicles, fixtures, office equipment and construction in progress.
Classes combine assets of similar nature and use. Avoid combining materially different assets only to reduce disclosure detail.
Measurement basis
State whether each class uses the cost model or revaluation model. Where revaluation is used, disclose the effective date, whether an independent valuer was involved and other required information.
Review the IAS 16 revaluation guide.
Depreciation methods and useful lives
Disclose the depreciation method and useful life or rate for each class. The method should reflect the consumption pattern rather than a tax rule or convenience.
See the depreciation methods guide.
Gross carrying amount and accumulated depreciation
Report gross carrying amount and accumulated depreciation and impairment at the beginning and end of the period. These amounts should reconcile with the fixed asset register and trial balance.
Movement reconciliation
A reconciliation commonly includes:
- additions;
- assets acquired through business combinations;
- disposals and assets classified as held for sale;
- revaluation increases and decreases;
- impairment losses and reversals;
- depreciation;
- exchange differences;
- other material changes.
Worked reconciliation example
Opening machinery carrying amount is 600,000 CU. Additions are 140,000 CU, disposals have carrying amount 30,000 CU, depreciation is 80,000 CU and impairment is 20,000 CU.
Closing carrying amount is:
600,000 + 140,000 − 30,000 − 80,000 − 20,000 = 610,000 CU
Restrictions and pledged assets
Disclose restrictions on title and the carrying amount of assets pledged as security for liabilities. Reconcile this information with loan agreements, charges and legal registers.
Capital commitments
Contractual commitments to acquire property, plant and equipment help users assess future cash requirements. Include approved binding contracts that meet the disclosure requirement, not merely internal budgets.
Construction in progress
Disaggregate material construction-in-progress balances and explain significant stalled or delayed projects when material. Review costs for impairment and capitalisation eligibility.
Revalued assets
For revalued classes, additional disclosures include the revaluation date, valuer involvement and revaluation surplus information. The carrying amount under the cost model may also be required.
Idle and fully depreciated assets
IAS 16 encourages useful additional information such as carrying amounts of temporarily idle assets, gross carrying amounts of fully depreciated assets still in use and fair value materially different from carrying amount under the cost model.
Such information can reveal ageing, capacity and replacement risk.
Compensation and asset losses
Compensation from third parties for impaired, lost or abandoned PPE is recognised separately under the applicable requirements and disclosed when material.
Climate-related matters
Climate risks can affect useful lives, residual values, impairment, decommissioning obligations and capital commitments. Material effects should be reflected in measurements and disclosures under existing Standards.
Fixed asset register connection
The register should store cost, dates, location, method, useful life, accumulated depreciation, impairment, revaluation and disposal data.
Use the fixed asset register guide.
Disposals and derecognition
Disposal information should reconcile the asset removed, accumulated depreciation, proceeds and gain or loss. Review the fixed asset disposal guide.
Changes in estimates
Changes in useful lives, residual values and depreciation methods are generally changes in estimates applied prospectively. Material changes should be explained under IAS 8 together with their current or expected effect when required.
Assets classified as held for sale
When IFRS 5 applies, the asset leaves the ordinary IAS 16 depreciation and presentation pattern. Reconcile transfers to held-for-sale categories and ensure the IAS 16 movement schedule is consistent.
Comparatives and restatements
Prior-year figures should agree with previously issued statements unless reclassification or restatement is required. Explain material changes in classification and preserve a clear bridge between years.
Disclosure preparation controls
- map every register class to the disclosure table;
- reconcile opening balances to prior-year statements;
- reconcile closing amounts to the ledger;
- review additions and disposals for cut-off;
- confirm revaluation and impairment movements;
- obtain legal information on pledges and restrictions;
- confirm capital commitments with procurement and legal teams.
Common mistakes
- disclosing only cost and closing carrying amount;
- omitting accumulated impairment;
- combining dissimilar asset classes;
- failing to reconcile movements to the ledger;
- using outdated useful lives in the notes;
- omitting pledged assets and commitments;
- presenting revaluation information without class-wide consistency.
Key takeaway
IAS 16 disclosures should explain both measurement policies and the movement in each material PPE class. A controlled reconciliation from the asset register to the notes is essential.
Official references: IAS 16 Property, Plant and Equipment and IAS 16 supporting material.