Competition Commission of Singapore Annual Report 2016/17

Historical cost is generally based on the fair value of the consideration given in exchange

for goods and services. Fair value is the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between market participants at the

measurement date, regardless of whether that price is directly observable or estimated

using another valuation technique. In estimating the fair value of an asset or a liability,

the Commission takes into account the characteristics of the asset or liability which

market participants would take into account when pricing the asset or liability at the

measurement date.

Fair value for measurement and/or disclosure purposes in the financial statements is

determined on such a basis, except for share-based payment transactions that are within

the scope of SB-FRS 102 Share-based Payment, leasing transactions that are within the

scope of SB-FRS 17 Leases, and measurements that have some similarities to fair value but

are not fair value, such as net realisable value in SB-FRS 2 Inventories or value in use in SB-

FRS 36 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorised into

Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are

observable and the significance of the inputs to the fair value measurement in its entirety,

which are described as follows:

i. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or

liabilities that the entity can access at the measurement date;

ii. Level 2 inputs are inputs, other than quoted prices included within Level 1, that are

observable for the asset or liability, either directly or indirectly; and

iii. Level 3 inputs are unobservable inputs for the asset or liability.

ADOPTION OF NEW AND REVISED STANDARDS - On 1 April 2016, the Commission

adopted all the new/revised SB-FRSs, INT SB-FRS and SB-FRS Guidance Notes that are

effective from that date and are relevant to its operations. The adoption of these new/

revised SB-FRSs, INT SB-FRS and SB-FRS Guidance Notes do not result in changes to the

Commission’s accounting policies and has no material effect on the amounts reported

for the current or prior years.

At the date of authorisation of these financial statements, the following SB-FRS that is

relevant to the Commission were issued but not effective:

• SB-FRS 109 Financial Instruments

• SB-FRS 115 Revenue from Contracts with Customers

• SB-FRS 116 Leases

Applies to annual periods beginning on or after 1 January 2018, with early

application permitted.

Applies to annual periods beginning on or after 1 January 2019, with early application

permitted if SB-FRS 115 is adopted.

Consequential amendments were also made to various standards as a result of these new/

revised standards.

Management anticipates that the adoption of the other SB-FRSs and INT SB-FRSs

and amendments to SB-FRSs that were issued as at the date of authorisation of these

financial statements but effective only in future periods will not have a material impact

on the financial statements of the Commission in the period of their initial adoption

except for the following:

SB-FRS 115 Revenue from Contracts with Customers

In November 2014, SB-FRS 115 was issued which establishes a single comprehensive model

for entities to use in accounting for revenue arising from contracts with customers. SB-FRS

115 will supersede the current revenue recognition guidance including SB-FRS 18 Revenue,

SB-FRS 11 Construction Contracts and the related Interpretations when it becomes

effective. The core principle of SB-FRS 115 is that an entity should recognise revenue to

depict the transfer of promised goods or services to customers in an amount that reflects

the consideration to which the entity expects to be entitled in exchange for those goods or

services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

• Step 1: Identify the contract(s) with a customer.

• Step 2: Identify the performance obligations in the contract.

• Step 3: Determine the transaction price.

• Step 4: Allocate the transaction price to the performance obligations in the contract.

• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

NOTES TO FINANCIAL STATEMENTS

31 March 2017

ANNUAL REPORT 2016