HSBC 2008 Annual Report Download - page 344

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Note 1
342
(g) Future accounting developments
Standards and Interpretations issued by the IASB and endorsed by the EU
IFRS 8 ‘Operating Segments’ (‘IFRS 8’), which replaces IAS 14 ‘Segment Reporting’ (‘IAS 14’), was issued
on 30 November 2006 and is effective for annual periods beginning on or after 1 January 2009. This standard
specifies how an entity should disclose information about its segments which enables users to evaluate the nature
and financial effects of its business activities and the economic environments in which it operates. HSBC will
adopt IFRS 8 with effect from 1 January 2009, and will accordingly present financial information for segments
whose operating activities are regularly reviewed by the chief operating decision maker in order to make
decisions about allocating resources and assessing performance. HSBC currently presents two sets of segment
data in accordance with IAS 14, one geographical and one based on customer groups. Under IFRS 8, HSBC
expects that its operating segments will be presented by geographic region. In addition, HSBC will continue
to provide information on financial performance by customer group and global businesses alongside the
geographical operating segment information in the ‘Operating and financial review’.
A revised IAS 1, which is applicable for annual periods beginning on or after 1 January 2009, was issued on
6 September 2007. The revised standard aims to improve users’ ability to analyse and compare information
given in financial statements. The adoption of the revised standard will have no effect on the results reported
in HSBC’s consolidated financial statements or the separate financial statements of HSBC Holdings. It will,
however, result in certain presentational changes in the primary financial statements of HSBC and HSBC
Holdings.
The IASB issued an amendment to IFRS 2 ‘Share-based Payment’ – ‘Vesting Conditions and Cancellations’ on
17 January 2008. The amendment, which is applicable for annual periods beginning on or after 1 January 2009,
clarifies that vesting conditions comprise only service conditions and performance conditions. It also specifies
the accounting treatment for a failure to meet a non-vesting condition. HSBC does not expect adoption of the
amendment to have a significant effect on HSBC’s consolidated financial statements or the separate financial
statements of HSBC Holdings.
The IASB issued a revised IAS 23 ‘Borrowing Costs’ on 29 March 2007, which is applicable for annual periods
beginning on or after 1 January 2009. The revised standard eliminates the option of recognising borrowing costs
immediately as an expense, to the extent that they are directly attributable to the acquisition, construction or
production of a qualifying asset. HSBC does not expect adoption of the revised standard to have a significant
effect on the consolidated financial statements or the separate financial statements of HSBC Holdings.
IFRIC 13 ‘Customer Loyalty Programmes’ (‘IFRIC 13’) was issued on 28 June 2007 and is effective for annual
periods beginning on or after 1 July 2008. IFRIC 13 addresses how companies that grant their customers loyalty
award credits (often called ‘points’) when buying goods or services should account for their obligation to
provide free or discounted goods and services, if and when the customers redeem the points. IFRIC 13 requires
companies to allocate some of the proceeds of the initial sale to the award credits and recognise these proceeds
as revenue when they have fulfilled their obligations to provide goods or services. HSBC does not expect the
adoption of this interpretation to have a significant effect on the consolidated financial statements. This
interpretation will have no effect on the separate financial statements of HSBC Holdings.
Standards and Interpretations issued by the IASB but not endorsed by the EU
At 31 December 2008, the following amendments to standards and interpretations, effective for these
consolidated financial statements, were issued by the IASB but not endorsed by the EU:
• an amendment to IAS 39 and to IFRS 7 – ‘Reclassification of Financial Assets – Effective Date and
Transition’ was issued on 27 November 2008. The amendment, which clarifies the effective date of the
Reclassification Amendment, will have no effect on the consolidated financial statements of HSBC or the
separate financial statements of HSBC Holdings; and
• IFRIC 12 ‘Service Concession Arrangements’ was issued on 30 November 2006 and is effective for annual
periods beginning on or after 1 January 2008. The adoption of this interpretation is not expected to have a
significant effect on the consolidated financial statements of HSBC or the separate financial statements of
HSBC Holdings.