NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
57
ANNUAL REPORT 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3
STANDARDS ISSUED BUT NOT YET EFFECTIVE (CONT’D)
The directors expect that the adoption of the standards and amendments above will have no material impact on the
financial statements in the period of initial application, except as discussed below:
FRS 115 Revenue from Contracts with Customers
FRS 115 establishes a five-step model that will apply to revenue arising from contracts with customers. Under FRS 115,
revenue is recognised at an amount that reflects the consideration which an entity expects to be entitled in exchange for
transferring goods or services to a customer. The principles in FRS 115 provide a more structured approach to measuring
and recognising revenue when the promised goods and services are transferred to the customer i.e. when performance
obligations are satisfied.
Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018. The
Group is in the process of reviewing the implications of this standard.
FRS 109 Financial Instruments
FRS 109 introduces new requirements for classification and measurement of financial assets, impairment of financial assets
and hedge accounting. Financial assets are classified according to their contractual cash flow characteristics and the
business model under which they are held. The impairment requirements in FRS 109 are based on an expected credit
loss model and replace the FRS 39 incurred loss model. Adopting the expected credit losses requirements will require the
Group to make changes to its current systems and processes.
FRS 109 is effective for annual periods beginning on or after 1 January 2018. Retrospective application is required, but
comparative information is not compulsory. The Group is in the process of reviewing the implications of this standard.
2.4
BASIS OF CONSOLIDATION AND BUSINESS COMBINATIONS
(a)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as
at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the
consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting
policies are applied to like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group
transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.
