TPCC Annual Report 2008.indd - HeidelbergCement

IFRS 8 Operating Segments
Tanzania Portland Cement Company Ltd, Annual Report 2008
The IASB issued IFRS 8 in November 2006. IFRS 8 replaces IAS 14 Segment Reporting upon its effective date. This
standard requires disclosure about the Company’s operating segments and replaced the requirement to determine pri-
mary (business) and secondary (geographical) reporting segments of the Company. The Company is reported on as one
single operating segment and as such the new standard had no impact on the financial presentation.
IAS 23 Borrowing Costs (Revised)
The IASB issued an amendment to IAS 23 in April 2007. The revised IAS 23 requires capitalisation of borrowing costs
that are directly attributable to the acquisition, construction or production of a qualifying asset. The Company’s previ-
ous policy was to expense borrowing costs as they were incurred. In accordance with the transitional provisions of the
amended IAS 23, the Company has adopted this revised standard on a prospective basis. Therefore, borrowing costs
are capitalised on qualifying assets with a commencement date on or after 1 January 2008. During the 12 months to 31
December 2008, TZS 605 million of borrowing costs have been capitalized under capital work-in-progress.
Improvements to IFRSs
In May 2008 the International Accounting Standards Board issued its first omnibus of amendments to its standards,
primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions for
each standard.
The Company has early adopted the following amendments to standards:
• IAS 1 Presentation of Financial Statements: Assets and liabilities classified as held for trading in accordance with
IAS 39 Financial Instruments: Recognition and Measurement are not automatically classified as current in the
balance sheet. The Company amended its accounting policy accordingly and analysed whether management’s
expectation of the period of realisation of financial assets and liabilities differed from the classification of the
instrument. This did not result in any re-classification of financial instruments between current and non-current
in the balance sheet.
• IAS 16 Property, Plant and Equipment: Replace the term “net selling price” with “fair value less costs to sell”.
The Company amended its accounting policy accordingly, which did not result in any change in the financial
position.
• IAS 23 Borrowing Costs: The definition of borrowing costs is revised to consolidate the two types of items that
are considered components of ‘borrowing costs’ into one – the interest expense calculated using the effective
interest rate method calculated in accordance with IAS 39. The Company has amended its accounting policy
accordingly which did not result in any change in its financial position.
• IAS 28 Investment in Associates: If an associate is accounted for at fair value in accordance with IAS 39, IAS 28
only requires the Company to disclose the nature and extent of any significant restrictions on the ability of the
associate to transfer funds to the entity in the form of cash or repayment of loans applies. This amendment has
no impact on the Company as it does not have any investment in associates.
• IAS 31 Interest in Joint Ventures: If a joint venture is accounted for at fair value, in accordance with IAS 39,
IAS 31 only requires the Company to disclose the commitments of the venturer and the joint venture, as well
as summary financial information about the assets, liabilities, income and expense. This amendment has no
impact on the Company because it does not have any interest in joint ventures.
• IAS 36 Impairment of Assets: When discounted cash flows are used to estimate ‘fair value less cost to sell’ ad-
ditional disclosure is required about the discount rate, consistent with disclosures required when the discount-
ed cash flows are used to estimate ‘value in use’. This amendment has no immediate impact on the financial
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