Page 197 - Interloop Annual Report 2018-2019

NOTES TO THE CONSOLIDATED NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2019 FOR THE YEAR ENDED JUNE 30, 2019

There is no impact of the said change on these consolidated financial statements as there is no hedge of a new liability. The difference in the respective carrying amounts is recognized in the consolidated
activity carried on by the Company during the year ended June 30, 2019. statement of profit or loss.

7.1.2 Financial liabilities 7.1.3 Offsetting of financial assets and liabilities

A. Classification and measurement Financial assets and financial liabilities are set off and the net amount is reported in the financial
statements when there is a legally enforceable right to set off and the company intends either to settle
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through on a net basis, or to realize the assets and to settle the liabilities simultaneously.
profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate. 7.1.4 Impacts of adoption of IFRS 9 on these consolidated financial statements

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings At transition date to IFRS 9, the Company has financial assets measured at amortized cost and
and payables, net of directly attributable transaction costs.
investments in mutual funds at fair value through profit or loss. The new classification and measurement
of the Company’s financial assets are, as follows:
i) Financial liabilities at fair value through profit or loss
Debt instruments at amortized cost for financial assets that are held within a business model with
Financial liabilities at fair value through profit or loss include financial liabilities held for trading the objective to hold the financial assets in order to collect contractual cash flows that meet the SPPI
and financial liabilities designated upon initial recognition as at fair value through profit or loss. criterion.
Gains or losses on liabilities held for trading are recognized in the consolidated statement of profit
or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss Investments in mutual funds that are held for trading in near term and has recognized initially and
are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The subsequently at fair value through profit or loss. On application of IFRS - 9 the Company has not opted
Company has not designated any financial liability as at fair value through profit or loss.
to recognize investments in mutual funds at fair value through other comprehensive income (FVTOCI).
These are recognized as fair value through profit or loss.
ii) Loans and borrowings
Further all financial assets previously classified under the head ‘loans and receivables’ are now classified
This is the category most relevant to the Company. After initial recognition, interest-bearing loans as ‘amortised cost’.
and borrowings are subsequently measured at amortized cost using the EIR (effective interest
rate) method. Gains and losses are recognized in the statement of profit or loss when the liabilities The accounting for the Company’s financial liabilities remains largely the same as it was under IAS 39.
are derecognized as well as through the EIR amortisation process.
Accordingly, the adoption of IFRS 9 has not had a significant effect on the Company’s accounting
Amortized cost is calculated by taking into account any discount or premium on acquisition and policies related to financial assets and liabilities.
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs
in the statement of profit or loss.
7.2 IFRS 15, ‘Revenue from Contracts with Customers’:
This category generally applies to interest-bearing loans and borrowings.
The Company has adopted IFRS 15 by applying the modified retrospective approach according to
which the Company is not required to restate the prior year results.
B. Derecognition
Key changes in accounting policies resulting from application of IFRS 15
A financial liability is derecognized when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on 7.2.1 Revenue recognition
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition Revenue is recognized at an amount that reflects the consideration to which the Company is expected 2018 - 19
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