Notes to the Company financial statements
1. Adoption of new accounting standards
New financial reporting standards (FRS) and abstracts adopted in 2007/08
During the year the Company has adopted the following FRSs and abstracts. None of these had a material impact on consolidated results or assets and liabilities.
| Amendment to FRS 3 on reporting financial performance | Removes inconsistencies between FRS 3 and both FRS 26 ‘Financial Instruments: Recognition and measurement’ and FRS 23 ‘The effects of changes in foreign exchange rates’, in particular as regards recycling to the profit and loss account of gains and losses and exchange differences previously recognised in the statement of recognised gains and losses. |
| Amendment to FRS 26 on financial instruments: measurement – recognition and derecognition | Implements the recognition and derecognition material in IAS 39. The requirements of FRS 5, ‘‘Reporting the substance of transactions’, are superseded for transactions that fall within FRS 26’s scope, but FRS 5 continues to apply to transactions in non-financial assets and liabilities. |
| UITF Abstract 42 on reassessment of embedded derivatives | Prohibits reassessment of the treatment of embedded derivatives subsequent to initial recognition unless there is a change in the terms of the contract that significantly modifies the cash flows that otherwise would be required under the contract, in which case reassessment is required. |
| UITF Abstract 44 on group and treasury share transactions | Provides guidance on whether share-based transactions involving treasury shares or involving group entities (for instance, options over a parent’s shares) should be accounted for as equity-settled or cash-settled. |
New FRS not yet adopted
The Company has yet to adopt the following FRS, however, it is not expected to have a material impact on the Company’s results or assets and liabilities.
| Amendment to FRS 20 on share-based payment | Clarifies the definition of vesting conditions and the accounting treatment of cancellations. Vesting conditions are defined as either service conditions or performance conditions. Cancellations by employees are accounted for in the same way as cancellations by the Company. It is expected that the amendment to FRS 20 will be adopted on 1 April 2009. |