Republic Bank Limited
80
For the year ended September 30, 2015. Expressed in thousands of Trinidad and Tobago dollars ($’000) except where otherwise stated
Notes to theConsolidatedFinancial Statements
4
Financial
2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
2.4 Standards in issue not yet effective
(continued)
IFRS 11 – Accounting for Acquisitions of Interests in Joint Operations – Amendments to IFRS 11 (effective January 1,
2016)
(continued)
Furthermore, the amendments clarify that for the acquisition of an additional interest in a joint operation in which the activity
of the joint operation constitutes a business, previously held interests in the joint operation must not be remeasured if the joint
operator retains joint control.
The amendments to IFRS 11 increase the scope of transactions that would need to be assessed to determine whether they
represent the acquisition of a business or an asset, which would be highly judgemental. Entities need to consider the definition
carefully and select the appropriate accounting method based on the specific facts and circumstances of the transaction.
IFRS 14 – Regulatory Deferral Accounts (effective January 1, 2016)
The standard requires disclosures on the nature of, and risks associated with, the entity’s rate-regulation and the effects of that
rate-regulation on its financial statements. IFRS 14 allows an entity, whose activities are subject to rate-regulation, to continue
applying most of its existing accounting policies for regulatory deferral account balances upon its first-time adoption of IFRS.
Existing IFRS preparers are prohibited from applying this standard. Also, an entity whose current GAAP does not allow the
recognition of rate-regulated assets and liabilities, or that has not adopted such policy under its current GAAP, would not be
allowed to recognise them on first-time application of IFRS.
Entities that adopt IFRS 14 must present the regulatory deferral accounts as separate line items on the statement of financial
position and present movements in these account balances as separate line items in the statement of profit or loss and other
comprehensive income.
IFRS 15 – Revenue from Contracts with Customers (effective January 1, 2016)
IFRS 15 replaces all existing revenue requirements in IFRS (IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer
Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers
and SIC 31 Revenue – Barter Transactions Involving Advertising Services) and applies to all revenue arising from contracts with
customers. It also provides a model for the recognition and measurement of disposal of certain non-financial assets including
property, equipment and intangible assets.
The standard outlines the principles an entity must apply to measure and recognise revenue. The core principle is that an entity
will recognise revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for
transferring goods or services to a customer.
The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when
applying each step of the model to contracts with their customers.
The standard also specifies how to account for the incremental costs of obtaining a contract and the costs directly related to
fulfilling a contract.
The standard will affect entities across all industries. Adoption will be a significant undertaking for most entities with potential
changes to an entity’s current accounting, systems and processes.
