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AFRICAN DAWN Annual Report 2016

Accounting Policies 1. Accounting Policies 1.1 Summary of accounting policies The consolidated financial statements of the group have been prepared in accordance with International Financial Reporting Standards (IFRS), the requirements of the Companies Act of 2008 and the JSE Listing Requirements and Financial reporting pronouncements as issued by the FRSC, SAICA financial reporting Guidelines as issued by the APC. The consolidated financial statements have been prepared using the historical cost convention, as modified for certain items measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for goods or services. The principal accounting policies applied in the preparation of these consolidated financial statements are set out in this note. These policies have been consistently applied to all the years presented, unless otherwise stated. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas that involve a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 1.19. The consolidated financial statements for the year ended 29 February 2016 (including comparatives) were approved and authorised for issue by the board of directors on 31 May 2016. Amendments to the financial statements are not permitted after approval. 1.2 Changes in accounting policies and basis of preparation New and revised standards that are effective for annual periods beginning on or after 1 March 2015. The Group has early adopted an amendment to IAS 27 – Separate Financial Statements, which permits entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements. The Group has elected to apply the equity method to account for investments in associates in the separate financial statements of the investor. A number of new and revised standards are effective for annual periods beginning on or after 1 March 2015. Information on these new standards is presented below. None of these have an impact on the recognition and measurement of assets and liabilities within the Group. However, comparative information is provided for new disclosures where applicable and required in terms of the standards. • Amendments to IFRS 10, IFRS 12 and IAS 27 – Investment entities (1 March 2015) • Amendment to IAS 32 – Offsetting financial assets and financial liabilities (1 March 2014) • Amendment to IAS 36 – Recoverable amount disclosures for non-financial assets (1 March 2014) • Amendment to IAS 39 – Novation of derivatives and continuation of hedge accounting (1 March 2014) • IFRIC 21 Levies (1 March 2014) 1.3 Basis of consolidation Subsidiaries Subsidiaries are those entities, including unincorporated entities such as trusts and partnerships that are controlled by the Group. Subsidiaries include structured entities that are designed so that its activities are not governed by way of voting rights. Control The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The group is considered to have power over an entity when it has existing rights that give it the current ability to direct the relevant activities of the entity. The group is exposed, or has rights, to variable returns from its involvement with the entity when the investor’s returns from its involvement have the potential to vary as a result of the entity’s performance. 36 AFRICAN DAWN ANNUAL REPORT 2016


AFRICAN DAWN Annual Report 2016
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