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AFRICAN DAWN ANNUAL REPORT 14

Notes to the Financial Statements 2. New Standards and Interpretations continued 2.2 Standards and interpretations not yet effective The group has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the groupís accounting periods beginning on or after 1 March 2014 or later periods: IFRS 9 Financial Instruments This new standard is the first phase of a three phase project to replace IAS 39 Financial Instruments: Recognition and Measurement. To date, the standard includes chapters for classification, measurement and derecognition of financial assets and liabilities. The following are main changes from IAS 39: • Financial assets will be categorised as those subsequently measured at fair value or at amortised cost. • Financial assets at amortised cost are those financial assets where the business model for managing the assets is to hold the assets to collect contractual cash flows (where the contractual cash flows represent payments of principal and interest only). All other financial assets are to be subsequently measured at fair value. • Under certain circumstances, financial assets may be designated as at fair value. • For hybrid contracts, where the host contract is an asset within the scope of IFRS 9, then the whole instrument is classified in accordance with IFRS 9, without separation of the embedded derivative. In other circumstances, the provisions of IAS 39 still apply. • Voluntary reclassification of financial assets is prohibited. Financial assets shall be reclassified if the entity changes its business model for the management of financial assets. In such circumstances, reclassification takes place prospectively from the beginning of the first reporting period after the date of change of the business model. • Financial liabilities shall not be reclassified. • Investments in equity instruments may be measured at fair value through other comprehensive income. When such an election is made, it may not subsequently be revoked, and gains or losses accumulated in equity are not recycled to profit or loss on derecognition of the investment. The election may be made per individual investment. • IFRS 9 does not allow for investments in equity instruments to be measured at cost. • The classification categories for financial liabilities remains unchanged. However, where a financial liability is designated as at fair value through profit or loss, the change in fair value attributable to changes in the liabilities credit risk shall be presented in other comprehensive income. This excludes situations where such presentation will create or enlarge an accounting mismatch, in which case, the full fair value adjustment shall be recognised in profit or loss. The effective date of the standard is for years beginning on or after 01 January 2018. The group expects to adopt the standard for the first time in the 2019 financial statements. The impact of this standard is currently being assessed. IAS 36 - Recoverable Amount Disclosures for Non-Financial Assets The amendment brings the disclosures for impaired assets whose recoverable amount is fair value less costs to sell in line with the disclosure requirements of IFRS 13 Fair Value Measurements. The effective date of the amendment is for years beginning on or after 1 January 2014. The group expects to adopt the amendment for the first time in the 2015 financial statements. It is unlikely that the amendment will have a material impact on the company's financial statements. AFRICAN DAWN 4 5 ANNUAL REPORT 2014


AFRICAN DAWN ANNUAL REPORT 14
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