Airtel 2014 Annual Report Download - page 208

Notes to consolidated financial statements
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Annual Report 2014-15
206
Further details on purchase price allocation have
been disclosed in Note 7.
f. Intangible assets
Refer Note 3.6 for the estimated useful life of
intangible assets. The carrying value of intangible
assets has been disclosed in Note 15.
g. Property, plant and equipment
Refer Note 3.7 for the estimated useful life of property,
plant and equipment. The carrying value of property,
plant and equipment has been disclosed in Note 14.
h. Activation and installation fees
The Group receives activation and installation fees
from new customers. These fees together with
directly attributable costs are amortised over the
estimated duration of customer life. The customer life
is reviewed periodically. The estimated customer life
principally reflects management’s view of the average
economic life of the customer base and is assessed
by reference to key performance indicators (KPIs)
which are linked to establishment/ ascertainment of
customer life. A change in such KPIs may lead to a
change in the estimated useful life and an increase/
decrease in the amortisation income/ charge. The
Group believes that the change in such KPIs will not
have any material effect on the financial statements.
i. Contingencies
Refer Note 36 (ii) for details of contingencies.
5. Standards issued but not yet effective up to
the date of issuance of the Group’s financial
statements
The new Standards, interpretations and amendments to
Standards that are issued, but not yet effective, up to
the date of issuance of the Group’s financial statements
are disclosed below. The Group intends to adopt these
Standards, if applicable, when they become effective.
a. IFRS 9 Financial Instruments
In July 2014, the IASB issued the final version of IFRS
9 Financial Instruments which reflects all phases of
the financial instruments project and replaces IAS 39
Financial Instruments: Recognition and Measurement
and all previous versions of IFRS 9. The standard
introduces new requirements for classification and
measurement, impairment, and hedge accounting.
The effective date of IFRS 9 is annual periods beginning
on or after January 1, 2018, with early adoption
permitted. Retrospective application is required,
but comparative information is not compulsory.
The Group is required to adopt the standard by the
financial year commencing April 1, 2018. The Group is
currently evaluating the requirements of IFRS 9, and
has not yet determined the impact on the consolidated
financial statements.
b. Amendments to IAS 19 Defined Benefit Plans:
Employee Contributions
In November 2013, IASB issued amendments to IAS
19 Employee Benefits. IAS 19 requires an entity to
consider contributions from employees or third
parties when accounting for defined benefit plans.
Where the contributions are linked to service, they
should be attributed to periods of service as a negative
benefit. These amendments clarify that, if the amount
of the contributions is independent of the number of
years of service, an entity is permitted to recognise
such contributions as a reduction in the service cost in
the period in which the service is rendered, instead of
allocating the contributions to the periods of service.
This amendment is applicable to annual periods
beginning on or after July 1, 2014, with early adoption
permitted. The Group is required to adopt the
amendments by the financial year commencing April
1, 2015. The Group does not expect that the adoption
of the amendments will have any significant impact
on the consolidated financial statements.
c. IFRS 14 Regulatory Deferral Accounts
In January 2014, IASB issued an interim standard,
IFRS 14 Regulatory Deferral Accounts. The aim of
this interim standard is to enhance the comparability
of financial reporting by entities that are engaged in
rate-regulated activities. IFRS does not provide any
specific guidance for rate-regulated activities. The
IASB has a project to consider the broad issue of rate
regulation and plans to publish a Discussion Paper
on this subject in 2014. Pending the outcome of this
comprehensive Rate-regulated Activities project,
the IASB decided to develop IFRS 14 as an interim
measure.
The effective date of IFRS 14 is annual periods
beginning on or after January 1, 2016, with early
adoption permitted. The Group is required to adopt
the standard by the financial year commencing
April 1, 2016. The Group is currently evaluating the
requirements of IFRS 14, and has not yet determined
the impact on the consolidated financial statements.
d. Amendments to IFRS 11 : Accounting for Acquisitions
of Interests
In May 2014, IASB issued amendments to IFRS 11 Joint
Arrangements which requires that a joint operator,
who is accounting for the acquisition of an interest
in a joint operation, in which the activity of the joint
operation constitutes a business must apply the
relevant IFRS 3 principles for business combinations
accounting. The amendments also clarify that a
previously held interest in a joint operation is not
remeasured on the acquisition of an additional
interest in the same joint operation while joint control
is retained. In addition, a scope exclusion has been
added to IFRS 11 to specify that the amendments
do not apply when the parties sharing joint control,
including the reporting entity, are under common
control of the same ultimate controlling party.
The amendments are applicable to annual periods
beginning on or after January 1, 2016, with early
adoption permitted. The Group is required to adopt
the amendments by the financial year commencing
April 1, 2016. The Group does not expect that the