Page 18 - KELAG Annual Report 2017
P. 18

Annual Improvements to
            Various                       8/12/2016 (7/2/2017)   1/1/2017 or 1/1/2018   None
                    IFRSs (2014 to 2016 cycle)
                      Changes: Share-based   20/6/2016 (expected
            IFRS 2                                                 1/1/2018       None
                       payment transaction     for Q1 2018)
                        Application of IFRS 9
                      “Financial Instruments”
            IFRS 4                       12/9/2016 (3/11/2017)     1/1/2018       None
                        together with IFRS 4
                       “Insurance Contracts”
            IFRS 9     Financial Instruments                       1/1/2018    See below
                     Revenue from Contracts    28/5/2014 or
                         with Customers or     11/9/2015 or
            IFRS 15                                                1/1/2018    See below
                         amendments and   12/4/2016 (22/9/2016
                       clarifications thereon   or 31/10/2017)
            IFRS 16              Leases                            1/1/2019    See below

           IFRS 9 replaces IAS 39 as of financial year 2018. This standard establishes new principles to classify
           and measure financial instruments within the IFRS framework. Depending on the type of financial
           instrument and business model, the new categories provide for recognition at cost or fair value
           (in either the profit or loss for the period or other comprehensive income). The new regulations
           on the classification and subsequent measurements of financial assets and financial liabilities will
           not  have  a  significant  effect  on  KELAG’s  consolidated  financial  statements,  as  the  initial  and
           subsequent  measurements  of  the  majority  of  financial  instruments  will  be  carried  out  with
           principles comparable to the accounting methods used in the past.

           IFRS 9 also contains new regulations regarding the impairment of financial instruments, which in
           future is to be recognised using the expected credit loss model. Compared to the regulations of
           IAS 39 (incurred credit loss model), this will require impairments to be recognised sooner. Within
           the KELAG Group, trade receivables, non-current securities, bank balances and term deposits are
           the items particularly affected by this new rule. However, expected credit-loss calculations as of
           31 December 2017 showed that the new impairment rule would have no significant impact on
           the impairment amount. This is especially thanks to strict receivables and risk management. As a
           result, the Group frequently does business with counterparties with an investment grade rating,
           i.e., a good credit standing and low credit risk. According to IFRS 9.B5.5.22, the expected default
           within 12 months can be estimated for these counterparties and not the total expected retention
           period of the financial instrument in the Group. The KELAG Group will apply the suggestion in
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