Full Annual Report - Inchcape

Section
Three
Financial
statements
Accounting policies
The consolidated Financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union, and International Financial Reporting Interpretation Committee (IFRIC) interpretations and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS.
Accounting convention
The consolidated Financial statements have been prepared on a going concern basis and under the historical cost convention, except
for the retention of certain freehold properties and leasehold buildings at previously revalued amounts (which were treated as deemed
cost on transition to IFRS) and the measurement of certain balances at fair value as disclosed in the accounting policies below.
Going concern
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue as a going
concern for the foreseeable future.
As such, the Group continues to adopt the going concern basis in preparing the annual report and accounts.
Changes in accounting policy and disclosures
A number of new standards, amendments and interpretations are effective for the first time for 2009. The Group has adopted, with effect
from 1 January 2009, the amendments and revisions to standards noted below:
The Group has adopted IFRS 8, ‘Operating segments’ which replaces IAS 14 ‘Segment reporting’. The new standard requires segmental
reporting to be presented on the same basis as the internal management reporting. This has had no impact on the results or financial
position of the Group. All comparatives have been restated according to the revised segmental disclosure. Further discussion on the
changes can be seen in note 1, page 90.
IAS 1 (Revised), ‘Presentation of financial statements’ has been adopted by the Group, which prohibits the presentation of non-owner
items of income and expense in the consolidated statement of changes in equity. It has had no impact on the results or financial
position of the Group.
The Group has also adopted the amendment to IAS 16, ‘Property, plant and equipment’ on a prospective basis from 1 January 2009.
Group policy states that where an asset is held for rental to others, for a period of longer than 12 months, it is held as property, plant
and equipment and depreciated to residual value over the course of the lease. Upon expiry of the lease, when the asset is held for sale,
it is transferred to inventory at net book value and upon sale of the asset, the subsequent revenue and the net book value are recorded
on a gross basis, through revenue and cost of sales. The adoption of the amendment has not had a material impact on the results or
position of the Group for the period ended 31 December 2009.
Amendment to IFRS 7, ‘Financial instruments: Disclosures’ requires enhanced disclosures in respect of fair value measurements and
liquidity risk. While adopting the amendment, the Group has elected not to provide comparative information for these expanded
disclosures in the current year in accordance with the transitional reliefs offered in the amendment.
The following standards and interpretations have also been adopted by the Group but have not had an impact on the results or
financial position for the period ended 31 December 2009:
– IFRIC 9, ‘Reassessment of embedded derivatives’
– IFRIC 13, ‘Customer loyalty programmes’
– IFRIC 15, ‘Agreements for the construction of real estate’
– IFRIC 16, ‘Hedges of a net investment in a foreign operation’
– IFRIC 17, ‘Distributions of non-cash assets to owners’
– IFRIC 18, ‘Transfers of assets from customers’
– IFRS 2, ‘Share-based payment – Vesting conditions and cancellations’
– IAS 7, ‘Statement of cash flows: Presentation of a statement of cash flows’
– IAS 32 (Amendment), ‘Financial instruments: Presentation’
– IAS 39 (Amendment), ‘Financial instruments: Recognition and measurement’.
At the end of the reporting period, the following revised standards were in issue but were not yet effective. These standards have not
been early adopted by the Group, and will be applied for the Group’s financial years commencing on or after 1 January 2010:
– IAS 27, (Revised) ‘Consolidated and separate financial statements’
– IFRS 3, (Revised) ‘Business combinations’
– IAS 28, ‘Investments in associates’
– IAS 31, ‘Interest in joint ventures’
– IAS 38, ‘Amendment to IAS 38 Intangible assets: Recognition and measurement’
– IAS 17, ‘Amendment to IAS 17 Leases: Transitional provisions’
– IFRS 9, ‘Financial instruments’
– Amendment to IFRS 2, ‘Share-based payments group cash-settled transactions’.
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