Notes To The Financial Statements (Continued)
30 June 2015
IFRS 9 – Financial Instruments
On 24 July 2014, the IASB issued the final IFRS 9 – Financial Instruments standard, which replaces
earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 – Financial
Instruments : Recognition and Measurement.
This standard will include changes in the measurement bases of the organisation’s financial assets to
amortised cost, fair value through other comprehensive income or fair value through profit or loss.
Even though these measurement categories are similar to IAS 39, the criteria for classification into
these categories are significantly different. In addition, the IFRS 9 impairment model has been
changed from an “incurred loss” model, which is expected to increase the provision for bad debts
recognised in the organisation.
The standard is effective for annual periods beginning on or after 1 January 2018 with retrospective
application and early adoption permitted.
IFRS 15 – Revenue from Contracts with Customers
This standard replaces IAS 11 – Construction Contracts, IAS 18 – Revenue, IFRIC 13 – Customer
Loyalty Programmes, IFRIC 15 – Agreements for the Construction of Real Estate, IFRIC 18 –
Transfer of Assets from Customers and SIC-31 Revenue – Barter Transactions Involving
Advertising Services.
The standard contains a single model that applies to contracts with customers and two approaches to
recognising revenue : at a point in time or over time. The model features a contract-based five-step
analysis of transactions to determine whether, how much and when revenue is recognised.
This new standard will most likely not have a significant impact on the organisation.
The standard is effective for annual periods beginning on or after 1 January 2017, with early
adoption permitted under IFRS.
Use of estimates and judgements
The preparation of financial statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods
beginning on or after 1 January 2017, with early adoption permitted under IFRS.
In particular, significant areas of estimation, uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the financial
statements include:
•Property and equipment (Note 6)
44
Legal Resources Foundation Annual Report 2015
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