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AfrAsia Bank Limited and its Group Entities
Annual Report 2015
page 199
noteS to the finanCial StatementS
for the year ended 30 June 2015
2. ACCOUNTING POLICIES (CONTINUED)
2.4 Accounting standards and interpretations issued but not yet effective (Continued)
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38) - effective 1 January 2016
Amends IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets to:
clarify that a depreciation method that is based on revenue that is generated by an activity that includes the use of an asset is not appropriate for property, plant
and equipment;
introduce a rebuttable presumption that an amortisation method that is based on the revenue generated by an activity that includes the use of an intangible
asset is inappropriate, which can only be overcome in limited circumstances where the intangible asset is expressed as a measure of revenue, or when it can be
demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated; and
add guidance that expected future reductions in the selling price of an item that was produced using an asset could indicate the expectation of technological or
commercial obsolescence of the asset, which, in turn, might reflect a reduction of the future economic benefits embodied in the asset.
The amendment will not have an impact since the Group does not use a depreciation method based on revenue for its plant and equipment and intangible assets.
Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) - effective 1 January 2016
Amends IAS 16 - Property, Plant and Equipment and IAS 41 - Agriculture to:
include ‘bearer plants’ within the scope of IAS 16 rather than IAS 41, allowing such assets to be accounted for a property, plant and equipment and measured after
initial recognition on a cost or revaluation basis in accordance with IAS 16;
introduce a definition of ‘bearer plants’ as a living plant that is used in the production or supply of agricultural produce, is expected to bear produce for more than
one period and has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales; and
clarify that produce growing on bearer plants remains within the scope of IAS 41.
The amendment will not have an impact as the Group does not recognise ‘bearer plants’.
Amendments to IAS 27: Equity Method in Separate Financial Statements - effective 1 January 2016
The amendments will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial
statements. Entities already applying IFRS and electing to change to the equity method in its separate financial statements will have to apply that change retrospectively.
For first-time adopters of IFRS electing to use the equity method in its separate financial statements, they will be required to apply this method from the date of
transition to IFRS. The amendments are effective for annual periods beginning on or after 1 January 2016, with early adoption permitted.
The Group is still assessing whether this amendment to IAS 27 should be adopted.
Annual improvements 2012 – 2014 Cycle - effective 1 July 2016
The annual improvements 2012-2014 Cycle make amendments to the following standards:
IFRS 5 - Adds specific guidance in IFRS 5 for cases in which an entity reclassifies an asset from held for sale to held for distribution or vice versa and cases in
which held-for-distribution accounting is discontinued;
IFRS 7 – Additional guidance given to clarify whether a servicing contract is continuing involvement in a transferred assets, and clarification made on offsetting
disclosures in condensed interim financial statements;
IAS 9 – Clarifies that the high quality corporate bonds used in estimating the discount rate for post-employment benefits should be denominated in the same
currency as the benefits to be paid; and
IAS 34 – Clarifies the meaning of “elsewhere in the interim report” and require a cross reference.
The Directors will assess the impact of the amendments when they become effective.