IREIT Global.
annual report 2014
For the reporting period from 1 November 2013 (date of constitution) to 31 December 2014
Notes to the
Financial Statements
2.
SIGNIFICANT ACCOUNTING POLICIES
(Continued)
(a) Basis of preparation of financial statements
(Continued)
NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
(Continued)
IFRS 9 Financial Instruments
(Continued)
Key requirements of IFRS 9: (Continued)
•
The new general hedge accounting requirements retain the three types of hedge
accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility
has been introduced to the types of transactions eligible for hedge accounting,
specifically broadening the types of instruments that qualify for hedging instruments
and the types of risk components of non-financial items that are eligible for hedge
accounting. In addition, the effectiveness test has been overhauled and replaced
with the principle of an ‘economic relationship’. Retrospective assessment of hedge
effectiveness is also no longer required. Enhanced disclosure requirements about an
entity’s risk management activities have also been introduced.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued in May 2014, which establishes a single comprehensive model for
entities to use in accounting for revenue arising from contracts with customers. IFRS 15
will supercede the current revenue recognition guidance including IAS18
Revenue
, IAS11
Construction Contracts
and the related Interpretations when it becomes effective.
The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services. Specifically,
the Standard introduces a 5-step approach to revenue recognition:
•
Step 1: Identify the contract(s) with a customer.
•
Step 2: Identify the performance obligations in the contract.
•
Step 3: Determine the transaction price.
•
Step 4: Allocate the transaction price to the performance obligations in the contract.
•
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
