Page 231 - InterloopAnnualReport2020

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

7.12 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received and the group will comply with all attached conditions. Government grants received
by the group in the form of economic benefits are deferred and accounted for under income approach in
profit or loss. Relevant amortization income is recognized in profit or loss, net off with relevant expense, on
systematic basis over the period in which the expenses for the grants are intended to compensate.

7.13 Trade and other payables
Liabilities for trade and other payables are carried at their amortised cost, which approximate fair value of
the consideration to be paid in future for goods and services received, whether or not billed to the group.
Exchange gains and losses arising on translation in respect of liabilities in foreign currency are added to the
carrying amount of the respective liabilities.

7.14 Provisions
Provisions are recognized when the group has a present legal or constructive obligation as a result of past
events and it is probable that an outflow of resources will be required to settle the obligation and a reliable
estimate of the amount can be made.

Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate. If it is
no longer probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, the provisions are reversed.

7.15 Contingencies
The assessment of the contingencies inherently involves the exercise of significant judgment as the outcome
of the future events cannot be predicted with certainty. The group, based on the availability of the latest
information, estimates the value of contingent assets and liabilities which may differ on the occurrence/
non–occurrence of the uncertain future events.
7.16 Foreign currency translation
Transactions in foreign currency during the period are initially recorded in the functional currency at the rate
prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are
translated at functional currency at the rate of exchange prevailing at the reporting date. All non–monetary
assets and liabilities are translated into rupees at exchange rates prevailing on the date of transaction or on
date when fair values are determined. Exchange differences are charged to statement of profit or loss.

7.17 Revenue recognition
Revenue is recognized at an amount that reflects the consideration to which the group is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the group: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time
value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand–alone selling price of each distinct good or service to be delivered; and recognizes revenue
when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of
the goods or services promised.

Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the ‘expected value’ or ‘most likely amount’
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognized to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognized will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to
the constraining principle are initially recognized as deferred revenue in the form of a separate refund liability.
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