60 LV= Annual Report 2012
Notes to the Financial Statements continued
31 December 2012
1. Significant accounting policies (continued) this creates an accounting mismatch. The Group is yet to assess
IFRS 9’s full impact and intends to adopt IFRS 9 no later than the
1.4 Changes and future developments in accounting policies accounting period beginning on or after 1 January 2015, subject to
(i) New and amended standards adopted by the Group endorsement by the EU. The Group will also consider the impact of
There are no IFRSs or IFRIC interpretations that are effective the remaining phases of IFRS 9 when completed by the Board.
for the first time for the financial year beginning on or after
1 January 2012, that would be expected to have a material impact IFRS 10, ‘Consolidated financial statements’, builds on
on the Group.
existing principles by identifying the concept of control as the
determining factor in whether an entity should be included within
(ii) New standards and interpretations not yet adopted
the consolidated financial statements of the parent company.
A number of new standards and amendments to standards and
The standard provides additional guidance to assist in the
interpretations are effective for annual periods beginning after
determination of control where this is difficult to assess. The
1 January 2013, and have not been applied in preparing these
Group is yet to assess IFRS 10’s full impact and intends to adopt
consolidated financial statements. None of these is expected to
IFRS 10 no later than the accounting period beginning on or after
have a significant effect on the consolidated financial statements
1 January 2013, subject to endorsement by the EU.
of the Group, except the following set out below:
IFRS 12, ‘Disclosures of interests in other entities’, includes the
Amendment to IAS 1, ‘Financial statement presentation’ regarding
disclosure requirements for all forms of interests in other entities,
other comprehensive income. The main change resulting from
including joint arrangements, associates, special purpose vehicles
these amendments is a requirement for entities to group items
and other off balance sheet vehicles. The Group is yet to assess
presented in ‘other comprehensive income’ (OCI) on the basis
IFRS 12’s full impact and intends to adopt IFRS 12 no later than
of whether they are potentially reclassifiable to profit or loss
the accounting period beginning on or after 1 January 2013,
subsequently (reclassification adjustments). The amendments
do not address which items are presented in OCI. subject to endorsement by the EU.
IFRS 13, ‘Fair value measurement’, aims to improve consistency IAS 27 (revised) ‘Separate financial statements’, issued in May
and reduce complexity by providing a precise definition of fair value 2011. This standard includes the provisions on separate financial
and a single source of fair value measurement and disclosure statements that are left after the control provisions of IAS 27 have
requirements for use across IFRSs. The requirements, which are been included in the new IFRS 10. The Group is yet to assess the
largely aligned between IFRSs and US GAAP do not extend the use
, full impact of the amendments and intends to adopt the amended
of fair value accounting but provide guidance on how it should be IAS 27 no later than the accounting period beginning on or after
applied where its use is already required or permitted by other 1 January 2013.
standards within IFRSs or US GAAP .
IAS 28 (revised) ‘Investments in associates and joint ventures’,
IAS 19, ‘Employee benefits’, was amended in June 2011. issued in May 2011. This standard includes the requirements
The impact on the Society will be as follows: to immediately for joint ventures, as well as associates, to be equity accounted
recognise all past service costs; and to replace interest cost and following the issue of IFRS 11. The Group is yet to assess the full
expected return on plan assets with a net interest amount that impact of the amendments and intends to adopt the amended IAS
is calculated by applying the discount rate to the net defined 28 no later than the accounting period beginning on or after
benefit liability (asset). The Group is yet to assess the full 1 January 2013.
impact of the amendments.
IFRS 11 ‘Joint arrangements’, issued in May 2011. This standard
IFRS 9, ‘Financial instruments’, addresses the classification, provides for a more realistic reflection of joint arrangements by
measurement and recognition of financial assets and financial focusing on the rights and obligations of the arrangement, rather
liabilities. IFRS 9 was issued in November 2009 and October than its legal form. There are two types of joint arrangements:
2010. It replaces the parts of IAS 39 that relate to the joint operations and joint ventures. Joint operations arise where
classification and measurement of financial instruments. a joint operator has rights to the assets and obligations relating
IFRS 9 requires financial assets to be classified into two to the arrangement and hence accounts for its interest in assets,
measurement categories: those measured as at fair value liabilities, revenue and expenses. Joint ventures arise where the
and those measured at amortised cost. The determination is joint operator has rights to the net assets of the arrangement and
made at initial recognition. The classification depends on the hence equity accounts for its interest. Proportional consolidation
entity’s business model for managing its financial instruments of joint ventures is no longer allowed. The Group is yet to assess
and the contractual cash flow characteristics of the instrument. IFRS 11’s full impact and intends to adopt IFRS 11 no later than
For financial liabilities, the standard retains most of the IAS 39 the accounting period beginning on or after 1 January 2013.
requirements. The main change is that, in cases where the fair
value option is taken for financial liabilities, the part of a fair value There are no other IFRSs or IFRIC interpretations that are not
change due to an entity’s own credit risk is recorded in other yet effective that would be expected to have a material impact
comprehensive income rather than the income statement, unless on the Group.