Competition Commission of Singapore Annual Report 2016/17

Under SB-FRS 115, an entity recognises revenue when (or as) a performance obligation is

satisfied, i.e. when “control” of the goods or services underlying the particular performance

obligation is transferred to the customer. Far more prescriptive guidance has been added

in SB-FRS 115 to deal with specific scenarios. Furthermore, extensive disclosures are required

by SB-FRS 115.

The Commission anticipates that the initial application of the new SB-FRS 115 may result in

changes to the accounting policies relating to revenue recognition.

The Commission is currently assessing of the possible impact of implementing SB-FRS 115.

It is currently impracticable to disclose any further information on the known or reasonably

estimable impact to the Commission’s financial statements in the period of initial

application as the management has yet to complete its detailed assessment.

The Commission does not plan to early adopt the new SB-FRS 115.

SB-FRS 116 - Leases

SB-FRS 116 was issued in June 2016 and will supersede SB-FRS 17 Leases and its associated

interpretative guidance.

The Standard provides a comprehensive model for the identification of lease arrangements

and their treatment in the financial statements of both lessees and lessors. The

identification of leases, distinguishing between leases and service contracts, are

determined on the basis of whether there is an identified asset controlled by the customer.

Significant changes to lessee accounting are introduced, with the distinction between

operating and finance leases removed and assets and liabilities recognised in respect

of all leases (subject to limited exceptions for short-term leases and leases of low value

assets). The Standard maintains substantially the lessor accounting approach under the

predecessor SB-FRS 17.

The Commission anticipates that the initial application of the new SB-FRS 116 may result in

changes to the accounting policies relating to leases.

As at 31 March 2017, the Commission has non-cancellable operating lease commitment of

$3,805,044. SB-FRS 17 does not require the recognition of any right-of-use asset or liability

for future payments of these leases; instead, certain information is disclosed as operating

lease commitments. It is currently impracticable to provide a reasonable estimable of the

financial effect until the Commission completes its detailed assessment.

The Commission does not plan to early adopt the new SB-FRS 116.

FINANCIAL INSTRUMENTS - Financial assets and financial liabilities are recognised on the

Commission’s statement of financial position when the Commission becomes a party to

the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial

instrument and of allocating interest income or expense over the relevant period. The

effective interest rate is the rate that exactly discounts estimated future cash receipts or

payments (including all fees on points paid or received that form an integral part of the

effective interest rate, transaction costs and other premiums or discounts) through the

expected life of the financial instrument, or where appropriate, a shorter period. Income

and expense is recognised on an effective interest basis for debt instruments.

Financial assets

All financial assets are recognised and de-recognised on a trade date basis where the

purchase or sale of an investment is under a contract whose terms require delivery of the

investment within the timeframe established by the market concerned, and are initially

measured at fair value plus transaction costs, except for those financial assets classified as

at fair value through profit or loss which are initially measured at fair value.

Financial assets are classified as “other receivables”. The classification depends on the

nature and purpose of financial assets and is determined at the time of initial recognition.

Other receivables

Other receivables are measured at amortised cost using the effective interest method less

impairment. Interest is recognised by applying the effective interest method, except for

short-term receivables when the recognition of interest would be immaterial.

NOTES TO FINANCIAL STATEMENTS

31 March 2017

COMPETITION COMMISSION OF SINGAPORE