Page 76 - Forterra

74 FORTERRA
ANNUAL REPORT 2012
NOTES TO THE
FINANCIAL STATEMENTS
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for
annual periods beginning after 1 January 2012, and have not been applied in preparing these
financial statements. Those new standards, amendments to standards and interpretations
relevant to the Group’s operation are set out below.
Applicable for the Group’s 2013 financial statements
• FRS 113 Fair Value Measurement replaces the existing guidance on fair value measurement
in different FRSs with a single definition of fair value. The standard also establishes a
framework for measuring fair values and sets out the disclosure requirements for fair
value measurements.
The adoption of this standard will require the Group to re-assess the bases used for
determining the fair values of the Group’s investment properties and financial derivatives
computed for both measurement and disclosures purposes, and would result in more
extensive disclosures on fair value measurements.
In accordance with the transitional provisions, the Group will apply FRS 113 prospectively
as of 1 January 2013. On initial application of the standard, the Group does not expect
substantial changes to the bases used for determining fair values.
Applicable for the Group’s 2014 financial statements
• Amendments to FRS 32 Financial Instruments: Presentation – Offsetting Financial
Assets and Financial Liabilities, which clarifies the existing criteria for net presentation
on the face of the statement of financial position. Under the amendments, to qualify
for offsetting, the right to set off a financial asset and a financial liability must not be
contingent on a future event and must be enforceable both in the normal course of
business and in the event of default, insolvency or bankruptcy of the entity and all
counterparties.
The Group does not expect any material financial impact on the results and financial
position from the adoption of these amendments.
• FRS 110 Consolidated Financial Statements, which changes the definition of control
such that an investor controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns
through its power with the investee. FRS 110 introduces a single control model with a
series of indicators to assess control. FRS 110 also adds additional context, explanation
and application guidance based on the principle of control.
The Group has re-evaluated its involvement with investees under the new control
model. Based on its assessment as at 31 December 2012, the Group does not expect
any material financial impact on the results and financial position from the adoption of
FRS 110.