50
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Standards issued but not yet effective (cont’d)
Except for FRS 115 and FRS 109, the directors expect that the adoption of the standards above will have no
material impact on the financial statements in the period of initial application. The nature of the impending changes
in accounting policies on adoption of FRS 115 and FRS 109 are described below:
FRS 115
Revenue from Contracts with Customers
FRS 115 was issued in November 2014 and establishes a new 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
to 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. The new revenue standard
is applicable to all entities and will supersede all current revenue recognition requirements under FRS. Either a full
or modified retrospective application is required for annual periods beginning on or after 1 January 2017 with early
adoption permitted. The Group is currently assessing the impact of FRS 115 and will adopt the new standard on
the required effective date.
FRS 109
Financial Instruments
In December 2014, the ASC issued the final version of FRS 109 Financial Instruments which reflects all phases of
the financial instruments project and replaces FRS 39 Financial Instruments: Recognition and Measurement. The
standard introduces new requirements for classification and measurement, impairment, and hedge accounting.
FRS 109 is effective for annual periods beginning on or after 1 January 2018, with early application permitted.
Retrospective application is required, but comparative information is not compulsory in the year of adoption. The
adoption of FRS 109 will have an effect on the classification and measurement of the Group financial assets, but
no impact on the classification and measurement of the Group financial liabilities.
2.4 Significant accounting estimates and judgments
The preparation of the Group’s consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions
and estimates could result in outcomes that could require a material adjustment to the carrying amount of the
asset or liability affected in the future periods.
(a)
Judgments made in applying accounting policies
In the process of applying the Group's accounting policies, management has made the following judgments,
apart from those involving estimations, which has the most significant effect on the amounts recognised in
the consolidated financial statements:
Income taxes (cont’d)
The Group has exposure to income taxes in several jurisdictions. Significant judgment is involved in
determining the Group’s provision for income taxes. There are certain transactions and computations
for which the ultimate tax determination is uncertain during the ordinary course of business. The Group
recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recognised,
such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.
