WILLAS-ARRAY ELECTRONICS (HOLDINGS) LIMITED
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2016
2.
APPLICATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
– continued
IFRS 15 Revenue from Contracts with Customers
– continued
Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied,
i.e. when ‘control’ of the goods or services underlying the particular performance obligation is
transferred to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal
with specific scenarios. Furthermore, extensive disclosures are required by IFRS 15.
The directors of the Company anticipate that the application of IFRS 15 in the future may have
a material impact on the amounts reported and disclosures made in the accompanying financial
statements. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 15
until the Group performs a detailed review.
IFRS 16 Leases
IFRS 16 introduces a comprehensive model for the identification of lease arrangements and
accounting treatments for both lessors and lessees. It distinguishes leases and service contracts
on the basis of whether an identified asset is controlled by a customer. Subject to limited
exceptions for short-term leases and low value assets, distinctions of operating and finance leases
are removed for lessee accounting, and is replaced by a model where a right-of-use asset and a
corresponding liability have to be recognised for all leases by lessees. However, the standard does
not significantly change the accounting of lessors.
Application of IFRS 16 may result in the Group’s recognition of right-of-use assets and
corresponding liabilities in respect of certain lease arrangements. These assets and liabilities
are currently not required to be recognised but certain relevant information is disclosed as
commitments to these consolidated financial statements.
The Directors anticipate that the application of IFRS 16 in the future may have a material impact
on the amounts reported and disclosures made in the Group’s consolidated financial statements.
However, it is not practicable to provide a reasonable estimate of the effect of IFRS 16 until the
Group performs a detailed review.
