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AfrAsia Bank Limited and its Group Entities
Annual Report 2015
page 200
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)
Disclosure Initiative (Amendments to IAS 1) - effective 1 January 2016
Amends IAS 1 Presentation of Financial Statements to address perceived impediments to preparers exercising their judgement in presenting their financial reports
by making the following changes:
clarification that information should not be obscured by aggregating or by providing immaterial information, materiality considerations apply to the all parts of the
financial statements, and even when a standard requires a specific disclosure, materiality considerations do apply;
clarification that the list of line items to be presented in these statements can be disaggregated and aggregated as relevant and additional guidance on subtotals
in these statements and clarification that an entity’s share of OCI of equity-accounted associates and joint ventures should be presented in aggregate as single
line items based on whether or not it will subsequently be reclassified to profit or loss; and
additional examples of possible ways of ordering the notes to clarify that understandability and comparability should be considered when determining the order
of the notes and to demonstrate that the notes need not be presented in the order so far listed in paragraph 114 of IAS 1.
No early adoption of these standards and interpretations is intended by the Board of directors.
2.5 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below.
(a) Foreign currency translation
The financial statements are presented in Mauritian Rupees (‘MUR’). Each entity in the Group determines its own functional currency and items included in the
financial statements of each entity are measured using that functional currency.
(i) Transactions and balances
Transactions in foreign currencies are initially recorded at the functional currency rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the spot rate of exchange at the reporting date. All differences are taken to ‘Net
trading income’ in the statements of profit or loss and other comprehensive income, with the exception of differences in foreign currency borrowings that provide an
effective hedge against a net investment in a foreign entity. The differences are taken directly to equity until the disposal of the net investment, at which time they
are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the spot exchange rates as at the dates of recognition.
Non-monetary items measured at fair value in a foreign currency are translated using the spot exchange rates at the date when the fair value was determined.
(ii) Group Companies
On consolidation, the assets and liabilities of foreign operations are translated into Mauritian Rupees at the rate of exchange prevailing at the reporting date and
their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for
consolidation are recognised in ‘Other comprehensive income’. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that
particular foreign operation is recognised in the statements of profit or loss and other comprehensive income in ‘Other operating expenses’ or ‘Other operating
income’. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the
acquisition are treated as assets and liabilities of the foreign operations and translated at the closing rate.