Experian 2016 Annual Report Download - page 121

119•Notes to the Group nancial statementsFinancial statements
IFRS 9 and IFRS 15 are now expected to be effective for Experian for the year ending 31 March 2019 with IFRS 16 expected to
be effective for the year ending 31 March 2020 (all subject to EU endorsement). It is not currently practicable to quantify their
effect. IFRS 15 introduces a single, principles-based five-step revenue recognition model to be applied to all sales contracts.
Our assessment of the impact of IFRS 15 on the Group financial statements has commenced; areas of potential change have
been noted and are undergoing further review.
There are no other new standards, amendments to existing standards or interpretations that are not yet effective that would be
expected to have a material impact on the Group. Such developments are routinely reviewed by the Group and its financial reporting
systems are adapted as appropriate.
4. Significant accounting policies
The significant accounting policies applied are summarised below. They have been applied consistently to both years presented.
The explanations of these policies focus on areas where judgment is applied or which are particularly important in the financial
statements. Content from accounting standards, amendments and interpretations is excluded where there is simply no policy
choice under EU-IFRS. For ease of reference, the content within this note is arranged as follows:
• sections (a) to (d) – content that applies generally to the preparation of these financial statements;
• sections (e) to (m) – balance sheet policies, to be read in conjunction with specific notes as indicated;
• sections (n) to (u) – income statement policies, to be read in conjunction with specific notes as indicated; and
• section (v) – the policy and presentation principles adopted for disclosing segment information, in accordance with IFRS 8
‘Operating segments’.
(a) Basis of consolidation
Experian follows EU-IFRS including:
• IFRS 3 ‘Business combinations’;
• IFRS 5 ‘Non-current assets held for sale and discontinued operations’; and
• IFRS 10 ‘Consolidated financial statements’.
The Group financial statements incorporate the financial statements of the Company and its subsidiary undertakings. The accounting
policies of subsidiaries and segments used for consolidation purposes are consistent with Group policies. A list of the significant
subsidiaries is given in note 41(a) to these financial statements.
(b) Foreign currency translation
Experian follows EU-IFRS, including IAS 21 ‘The effects of changes in foreign exchange rates’.
(c) Fair value estimation
Experian follows EU-IFRS, including IFRS 13 ‘Fair value measurement’. The fair values of derivative financial instruments and other
financial assets and liabilities are determined by using market data and established estimation techniques such as discounted cash
flow and option valuation models. The fair value of foreign exchange contracts is based on a comparison of the contractual and year-
end exchange rates. The fair values of other derivative financial instruments are estimated by discounting the future cash flows to
net present values, using appropriate market rates prevailing at the year-end.
(d) Impairment of non-financial assets
Experian follows EU-IFRS, including IAS 36 ‘Impairment of assets’. Assets that are not subject to amortisation or depreciation are
tested annually for impairment. Assets that are subject to amortisation or depreciation are reviewed for impairment when there is an
indication that the carrying amount may not be recoverable. An impairment charge is recognised for the amount by which an asset’s
carrying amount exceeds its recoverable amount, which is the higher of an asset’s fair value less costs to sell, and value-in-use. For
the purposes of assessing impairment, assets are grouped into cash generating units (‘CGUs’), determined by the lowest levels for
which there are separately identifiable cash flows.