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Financials NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2016 3. Application of new and revised International Financial Reporting Standards (IFRSs) 3.2 New and revised IFRSs in issue but not yet effective IFRS 9 IFRS 15 IFRS 16 Financial Instruments2 Revenue from Contracts with Customers2 Leases3 Amendments to IFRS 2 Amendments to IFRS 10 and IAS 28 Amendments IAS 7 Amendments to IAS 12 1 Classification and Measurement of Share-based Transactions2 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture4 Disclosure Initiative1 Recognition of Deferred Tax Assets for Unrealised Losses1 Effective for annual periods beginning on or after 1st January, 2017, with earlier application permitted. 2 Effective for annual periods beginning on or after 1st January ,2018, with earlier application permitted. 3 Effective for annual periods beginning on or after 1st January ,2019, with earlier application permitted. 4 Effective for annual periods beginning on or after a date to be determined. IFRS 9 Financial Instruments IFRS 9 issued in November 2009 introduced new requirements for the classification and measurement of financial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include a) impairment requirements for financial assets and b) limited amendments to the classification and measurement requirements by introducing a ‘fair value through other comprehensive income’ (FVTOCI) measurement category for certain simple debt instruments. Key requirements of IFRS 9: • all recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. Debt instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are generally measured at FVTOCI. All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods. In addition, under IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss. • with regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of the financial liability designated as fair value through profit or loss is presented in profit or loss. • in relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as Annual Report 2016 165

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