notes to the
financial statements
31 December 2015
37.
New and revised financial reporting standards in issue but not yet effective (cont’d)
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. The Group is currently assessing the potential impact of
adopting this new standard on the financial statements and plans to adopt the standard on the required effective date.
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. Key issues for the Group include identifying performance obligations, accounting
for contract modifications, applying the constraint to variable consideration, evaluating significant financing components,
measuring progress toward satisfaction of a performance obligation, recognising contract cost assets and addressing
disclosure requirements. The Group is currently assessing the potential impact of adopting this new standard on the
financial statements and plans to adopt the standard on the required effective date.
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