AFRICAN DAWN ANNUAL REPORT 2019 41 Accounting Policies continued Classification and measurement of financial liabilities The classification and measurement of financial liabilities have not changed with the implementation of IFRS 9. The liabilities are still being measured at amortised cost. The borrowings from Peregrine Financial Services Holdings Limited have been subject to a number of re-negotiations in interest and settlement terms over the years and the loan has been analysed for changes in credit risk over the life of the loan. The effect has a financial impact in the fair value adjustment of the loan which has in the past been recorded through profit or loss. The assessment has not indicated any new fair value adjustments being required in the current or previous years so no financial adjustment has been made. Reconciliation of the reclassifications and remeasurements of financial assets as a result of adopting IFRS9 The following table presents a summary of the financial assets as at 01 March 2018. Group Items existing on 1 March 2018 that are subject to the impairment provisions of IFRS 9 Note Credit risk attributes Cumulative additional loss allowance recognised related to 2018 R,000 Trade and other receivables 9 The company applied the general approach and recognises lifetime expected credit losses for these assets, due to the short term nature of these assets. 1,130,430 Cash and cash equivalents 15 All bank balances are assessed to have low credit risk at each reporting date as they are held with reputable international banking institutions. - Total additional loss allowance 1,130,430 Company Items existing on 1 March 2018 that are subject to the impairment provisions of IFRS 9 Note Credit risk attributes Cumulative additional loss allowance recognised related to 2018 R,000 Loans to group companies 8 The directors have been raising loss allowance on the loans based on the general approach. The loan balances were compared to the net asset value of the respective companies to identify additional credit losses. The net asset value of the subsidiaries incorporates IFRS 9 impairment losses. 1,130,430 Trade and other receivables 9 The company applied the general approach and recognises lifetime expected credit losses for these assets. No adjustment was necessary. - Cash and cash equivalents 15 All bank balances are assessed to have low credit risk at each reporting date as they are held with reputable international banking institutions. - Total additional loss allowance 1,130,430 Reconciliation of the reclassifications and remeasurements of financial liabilities as a result of adopting IFRS9 The financial liabilities as at 1 March 2018 measure at amortised cost under IAS 39 were where tested for adjustment and the directors none were necessary.
AFDAWN AR FINAL 2019
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