Adcock Ingram Integrated Report 2018

143 ADCOCK INGRAM  Integrated Report 2018 Annexure I – Accounting policies continued Disclosure The new standard also introduces expanded disclosure requirements and changes in presentation. These are expected to change the nature and extent of the Group’s disclosures regarding its revenue particularly in the year of adoption of the new standard. Disclosures shall include the disaggregation of revenue by key categories. IFRS 16: LEASES IFRS 16 introduces significant changes to lessee accounting as it removes the distinction between operating and finance leases under IAS 17 and requires a lessee to recognise a right-of-use asset and a lease liability at lease commencement for all leases, except for short-term leases and leases of low value assets. The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications, amongst others. If a lessee elects not to apply the general requirements of IFRS 16 to short-term leases (i.e. one that does not include a purchase option and has a lease term at commencement date of 12 months or less) and leases of low value assets, the lessee should recognise the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis, similar to the current accounting for operating leases. IFRS 16 will be effective for the Group from 1 July 2019. IFRS 2: CLASSIFICATION AND MEASUREMENT OF SHARE-BASED PAYMENT TRANSACTIONS – AMENDMENTS The amendments address three main areas: • The effects of vesting conditions on a cash-settled share-based payment transaction; • The classification of a share-based payment transaction with net settlement features for withholding tax obligations; and • The accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash- settled to equity-settled. The amendments, effective from 1 July 2018, are narrow in scope and address specific areas of classification and measurement and are not expected to have a significant impact on the Group’s disclosure. IFRIC 22: FOREIGN CURRENCY TRANSACTIONS AND ADVANCE CONSIDERATION – INTERPRETATION The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. This interpretation is effective for the Group from 1 July 2018 and is not expected to have a significant impact on the Group’s disclosure. IFRIC 23: UNCERTAINTY OVER INCOME TAX TREATMENTS – INTERPRETATION In June 2017, the IASB issued IFRIC Interpretation 23: Uncertainty over Income Tax Treatments which clarifies application of the recognition and measurement requirements in IAS 12 Income Taxes when there is uncertainty over income tax treatments. The interpretation specifically addresses the following: • whether an entity considers uncertain tax treatments separately; • the assumptions an entity makes about the examination of tax treatments by taxation authorities; • how an entity determines taxable profit/(tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and • how an entity considers changes in facts and circumstances. This interpretation is effective for the Group from 1 July 2019 and is not expected to have a significant impact on the Group.