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DYNA-MAC HOLDINGS LTD.
2016 ANNUAL REPORT
111
Performance At A Glance
Financial Report
Corporate Governance and Transparency
Sustainable Growth
Year in Review
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2016
34.
NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS
(CONT’D)
There is now a new expected credit losses model that replaces the incurred loss impairment model used in
FRS 39. It applies to financial assets classified at amortised cost, debt instruments measured at fair value
through OCI, contract assets under FRS 115 Revenue from contracts with customers, lease receivables, loan
commitments and certain financial guarantee contracts. While the Group has not yet undertaken a detailed
assessment of how its impairment provisions would be affected by the new model, it may result in an earlier
recognition of credit losses.
The new standard also introduces expanded disclosure requirements and changes in presentation. These
are expected to change the nature and extent of the Group’s disclosures about its financial instruments
particularly in the year of the adoption of the new standard.
●
FRS 116 Leases (effective for annual periods beginning on or after 1 January 2019)
FRS 116 will result in almost all leases being recognised on the balance sheet, as the distinction between
operating and finance leases is removed. Under the new standard, an asset (the right to use the leased
item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and
low-value leases. The accounting for lessors will not change significantly.
The standard will affect primarily the accounting for the Group’s operating leases. As at the reporting
date, the Group has non-cancellable operating lease commitments of $56,299,000 (Note 30). However,
the Group has yet to determine to what extent these commitments will result in the recognition of an
asset and a liability for future payments and how this will affect the Group’s profit and classification
of cash flows.
Some of the commitments may be covered by the exception for short-term and low-value leases and
some commitments may relate to arrangements that will not qualify as leases under FRS 116.
35.
AUTHORISATION OF FINANCIAL STATEMENTS
These financial statements were authorised for issue in accordance with a resolution of the Board of Directors
of Dyna-Mac Holdings Ltd. on 31 March 2017.