SEC Form 20-IS - iRemit Global Remittance

- 22 -
3. Significant Accounting Judgments and Estimates
The preparation of the financial statements in compliance with PFRS requires the Group 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 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 Group
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.
Each entity in the Group determines its own functional currency being the currency that
mainly influences each entity’s revenues and costs and expenses. The functional currency of
the Parent Company is the Philippine peso, while those of the Parent Company’s subsidiaries
are disclosed in Note 1.
b. 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
Group are disclosed in Note 4.
c. Operating leases
Group as lessee
The Group has entered into commercial property leases as a lessee for its office premises. The
Group 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.
Group as lessor
The Group has entered into commercial property leases as lessor. The Group has determined,
based on an evaluation of the terms and conditions of the arrangements, that it retains all the
significant risks and rewards of ownership of these properties and accounts for the contracts as
operating leases.
*SGVMC116502*