Airtel 2012 Annual Report Download - page 173

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BHARTI AIRTEL ANNUAL REPORT 2011-12
j) Amendments to IAS 19 Employee Benefits
In June 2011, International Accounting Standards Board issued amendments to IAS 19. The revised standard includes a
number of amendments that range from fundamental changes to simple clarifications and re-wording. The most significant
changes that will apply are:
– Actuarial gains and losses are to be recognised in OCI when they occur. Amounts recognised in profit or loss are
limited to current and past service costs, gains or losses on settlements and net interest income (expense). All
other changes in the net defined benefit asset/liability are recognised in other comprehensive income with no
subsequent recycling to profit and loss.
– The net interest income or expense is the product of the net balance sheet liability or asset and the discount rate
used to measure the obligation – both as at the start of the year.
– Objectives for disclosures of defined benefits plans are explicitly stated in the revised IAS 19, along with new or
revised disclosure requirements. These new disclosures include quantitative information of the sensitivity of the
defined benefit obligation to a reasonably possible change in each significant actuarial assumption.
– Termination benefits will be recognised at the earlier of when the offer of termination cannot be withdrawn, or
when the related restructuring costs are recognised under IAS 37, Liabilities.
– The distinction between short-term and long-term employee benefits will be based on expected timing of
settlement rather than the employee’s entitlement benefits.
The Company is required to adopt the amendments by the financial year commencing April 1, 2013. The amendments need
to be adopted retrospectively with certain exceptions. The amendment will impact the accounting of actuarial gains and
losses on defined benefit obligations of the Group, which is presently being recognized in the income statement. These
would be required to be recognized in the other comprehensive income. A detailed assessment of the impact is currently
in progress.
k) Amendments to IAS 32 Financial Instruments : Presentation and IFRS 7 Financial Instruments : Disclosures
In December 2011, the International Accounting Standards Board issued amendments to IAS 32 and IFRS 7. The IASB
amended the accounting requirements and disclosures related to offsetting of financial assets and financial liabilities.
Amendments to IAS 32 clarify the meaning of ‘currently has a legally enforceable right of set-off’ and also clarify the application
of IAS 32 offsetting criteria to settlement systems which apply gross settlement mechanisms that are not simultaneous.
The amendments to IFRS 7 require an entity to disclose information about rights of offset and related arrangements (such as
collateral posting requirements) . The new disclosures are required for all recognised financial instruments that are set off in
accordance with IAS 32. These disclosures also apply to recognised financial instruments that are subject to an enforceable
master netting arrangement or ‘similar arrangement’, irrespective of whether they are set-off in accordance with IAS 32.
The Company is required to adopt the amendments to IFRS 7 and IAS 32 by the financial year commencing April 1, 2013 and
April 1, 2014, respectively. The Company is currently evaluating the requirements of the amendments, and has not yet
determined the impact on the consolidated financial statements.
l) The following Interpretations and amendments to standards have been issued as of March 31, 2012 but not yet effective
and have not yet been adopted by the Group. These are not expected to have any impact on the consolidated financial
statements:
S.No. Standards/ Interpretations/ Amendments Month of Issue Effective date - annual periods beginning on or after
1. Amendment to IAS 12, "Income Taxes" December, 2010 January 1, 2012
2. Amendment to IFRS 1, "First-time Adoption of
International Financial Reporting Standards" December, 2010 July 1, 2011
3. IFRIC Interpretation 20, "Stripping Costs in the
Production Phase of a Surface Mine" October, 2011 January 1, 2013