Page 226 - InterloopAnnualReport2020

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

– Amendments to IAS 1, ‘Presentation of financial statements’, and IAS 8, ‘Accounting policies,
changes in accounting estimates and errors’ (effective for the group’s annual period beginning on
January 1, 2020):
These amendments and consequential amendments to other IFRSs:
(i) use a consistent definition of materiality throughout IFRSs and the Conceptual Framework for Financial
Reporting;
(ii) clarify the explanation of the definition of material; and
(iii) incorporate some of the guidance in IAS 1 about immaterial information.

These amendments are not expected to have a significant impact on the group’s future financial
statements.

– Amendment to IFRS 3 ‘Business Combinations’ – Definition of a Business (effective for business
combinations for which the acquisition date is on or after the beginning of annual period beginning
on or after 1 January 2020):
The IASB has issued amendments aiming to resolve the difficulties that arise when an entity determines
whether it has acquired a business or a group of assets. The amendments clarify that to be considered a
business, an acquired set of activities and assets must include, at a minimum, an input and a substantive
process that together significantly contribute to the ability to create outputs. The amendments include an
election to use a concentration test. The standard is effective for transactions in the future and therefore
would not have an impact on past financial statements.

– Annual Improvements to IFRS Standards 2018–2020 Cycle. The new cycle of improvements
addresses improvements to following approved accounting standards (effective for annual period
beginning on or after January 01, 2022):
– IFRS 1 First–time Adoption of International Financial Reporting Standards. This amendment simplifies
the application of IFRS 1 for a subsidiary that becomes a first–time adopter of IFRS Standards later than
its parent – i.e. if a subsidiary adopts IFRS Standards later than its parent and applies IFRS 1.D16(a),
then a subsidiary may elect to measure cumulative translation differences for all foreign operations at
amounts included in the consolidated financial statements of the parent, based on the parent’s date of
transition to IFRS Standards.

– IFRS 9 Financial Instruments. The amendment clarifies which fees an entity includes when it applies the
‘10 percent’ test in assessing whether to derecognize a financial liability. An entity includes only fees
paid or received between the entity (the borrower) and the lender, including fees paid or received by
either the entity or the lender on the other’s behalf.

– IAS 41 Agriculture. The amendment removes the requirement for entities to exclude taxation cash flows
when measuring the fair value of a biological asset using a present value technique. This will ensure
consistency with the requirements in IFRS 13 – Fair Value Measurement.

There are other amendments and interpretations to the approved accounting standards that are not yet
effective and are also not relevant to the group and therefore, have not been presented here.

Further, the following new standards have been issued by the International Accounting Standards Board
(IASB), which are yet to be notified by the Securities and Exchange Commission of Pakistan (SECP), for the
purposes of their applicability in Pakistan:

IFRS – 1 ‘First time adoption of International Financial Reporting Standards’.

IFRS – 17 ‘Insurance Contracts’.

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