Chapter 3: Aggregation and disaggregation

Principles of aggregation and disaggregation
For the purposes of this Standard, an item is an asset, liability, equity instrument or reserve, income, expense or cash flow or any aggregation or disaggregation of such assets, liabilities, equity, income, expenses or cash flows. A line item is an item that is presented separately in the primary financial statements. Other material information about items is disclosed in the notes. Unless doing so would override specific aggregation or disaggregation requirements in IFRS Accounting Standards, an entity shall.

• classify and aggregate assets, liabilities, equity, income, expenses or cash flows into items based on shared characteristics;
• disaggregate items based on characteristics that are not shared;

• aggregate or disaggregate items to present line items in the primary financial statements that fulfil the role of the primary financial statements in providing useful structured  summaries;
• aggregate or disaggregate items to disclose information in the notes that fulfils the role of the notes in providing material information and
• ensure that aggregation and disaggregation in the financial statements do not obscure material information.

Applying the principles in paragraph 41, an entity shall disaggregate items whenever the resulting information is material. If, applying an entity does not present material information in the primary financial statements, it shall disclose the information in the notes. set out examples of income, expenses, assets, liabilities and items of equity that might have sufficiently dissimilar characteristics that presentation in the statement of profit or loss or statement of financial position or disclosure in the notes is necessary to provide material information.

An entity shall label and describe items presented in the primary financial statements (that is, totals, subtotals and line items) or items disclosed in the notes in a way that faithfully represents the characteristics of the item To faithfully represent an item, an entity shall provide all descriptions and explanations necessary for a user of financial statements to understand the item. In some cases, an entity might need to include in the descriptions and explanations the meaning of the terms the entity uses and information about how it has aggregated or disaggregated assets, liabilities, equity, income, expenses and cash flows.

Offsetting

An entity shall not offset assets and liabilities or income and  expenses, unless required or permitted by an IFRS Accounting Standard.

An entity reports separately both assets and liabilities, and income and expenses. Offsetting in the statement(s) of financial performance or the statement of financial position, except when offsetting reflects the substance of the transaction or other event, reduces users’ ability to understand the transactions and other events and conditions that have occurred and to assess the entity’s future cash flows. Measuring assets net of valuation allowances— for example, obsolescence allowances on inventories and allowances for expected credit losses on financial assets—is not offsetting.