NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
Financial Statements
147
Annual Report 2014
39.
New or revised accounting standards and interpretations
(continued)
FRS 113
Fair Value Measurement
(effective for annual periods beginning on or after 1 July 2014)
The amendment clarifies that the portfolio exception in FRS 113, which allows an entity to measure
the fair value of a group of financial assets and financial liabilities on a net basis, applies to all
contracts (including non-financial contracts) within the scope of FRS 39.
This amendment is not expected to have any significant impact on the financial statements of the
Group.
FRS 15
Revenue from Contracts with Customers
(effective for annual periods beginning on or after 1
January 2017)
The standard deals with revenue recognition and establishes principles for reporting useful
information to users of financial statements about the nature, amount, timing and uncertainty of
revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised
when a customer obtains control of a good or service and thus has the ability to direct the use and
obtain the benefits from the good or service. The standard replaces FRS 18 Revenue and FRS 11
Construction contracts and related interpretations.
The Group is assessing the impact of the standard on the financial statements.
FRS 9
Financial Instruments
(effective for annual periods beginning on or after 1 January 2018)
The standard addresses the classification, measurement and recognition of financial assets and
financial liabilities. The complete version of FRS 9 was issued in July 2014. It replaces the guidance
in FRS 39 that relates to the classification and measurement of financial instruments. FRS 9 retains
but simplifies the mixed measurement model and establishes three primary measurement categories
for financial assets: amortised cost, fair value through other comprehensive income and fair value
through P&L. The basis of classification depends on the entity’s business model and the contractual
cash flow characteristics of the financial asset. Investments in equity instruments are required to
be measured at fair value through profit or loss with the irrevocable option at inception to present
changes in fair value in other comprehensive income not recycling. There is now a new expected
credit losses model that replaces the incurred loss impairment model used in FRS 39. For financial
liabilities there were no changes to classification and measurement except for the recognition of
changes in own credit risk in other comprehensive income, for liabilities designated at fair value
through profit or loss. FRS 9 relaxes the requirements for hedge effectiveness by replacing the bright
line hedge effectiveness tests. It requires an economic relationship between the hedged item and
hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use
for risk management purposes. Contemporaneous documentation is still required but is different to
that currently prepared under FRS 39.
The Group has yet to assess the full impact of the standard on the financial statements.
40.
Comparatives
Certain comparative amounts have been reclassified for consistency with the presentation of the current
year consolidated financial statements. The reclassification has no material impact to the Group.
41.
Authorisation of financial statements
These financial statements were authorised for issue in accordance with a resolution of the Board of
Directors of COSCO Corporation (Singapore) Limited on 2 March 2015.
