SEC Form 20-IS - iRemit Global Remittance

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estate directly or through subcontractors. The Interpretation requires that revenue on construction
of real estate be recognized only upon completion, except when such contract qualifies as
construction contract to be accounted for under PAS 11, Construction Contracts, or involves
rendering of services in which case revenue is recognized based on stage of completion. Contracts
involving provision of services with the construction materials and where the risks and reward of
ownership are transferred to the buyer on a continuous basis will also be accounted for based on
stage of completion.
3. Significant Accounting Judgments and Estimates
The preparation of the parent company financial statements in compliance with PFRS requires the
Parent Company to make judgments and estimates that affect the reported amounts of assets,
liabilities, income and expenses and disclosure of contingent assets and contingent liabilities.
Future events may occur which will cause the assumptions used in arriving at the estimates to
change. The effects of any change in estimates are reflected in the parent company financial
statements as they become reasonably determinable.
Judgments and estimates are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Judgments
a. Functional Currency
PAS 21 requires management to use its judgment to determine the entity’s functional currency
such that it most faithfully represents the economic effects of the underlying transactions,
events and conditions that are relevant to the entity. In making this judgment, the Parent
Company considers the following:
• the currency that mainly influences sales prices for financial instruments and services (this
will often be the currency in which sales prices for its financial instruments and services
are denominated and settled);
• the currency in which funds from financing activities are generated; and
• the currency in which receipts from operating activities are usually retained.
The Parent Company determined its functional currency to be Philippine peso, being the
currency that mainly influences the Parent Company’s revenues and cost and expenses.
b. Operating leases
Parent Company as lessee
The Parent Company has entered into commercial property leases as a lessee for its office
premises. The Parent Company has determined that it has not acquired the significant risks
and rewards of ownership of the leased properties and so account for the contracts as operating
leases.
c. Fair value of financial instruments
The fair values of financial instruments that are not quoted in active markets are determined
using valuation techniques. The fair values of financial assets and financial liabilities of the
Parent Company are disclosed in Note 4.
*SGVMC116501*