The following standards, changes in already effective standards and interpretations are not endorsed by the European Union or are not effective as at January 1, 2016:
|Standard||Description of changes||Effective date|
|IFRS 9 Financial Instruments||Changes to the classification and measurement requirements – replacement of the existing categories of financial instruments with the two following categories: measured at amortized cost and at fair value. Changes to hedge accounting.||January 1, 2018|
|IFRS 14 Regulatory Deferral Accounts||Accounting and disclosure principles for regulatory deferral accounts||Standard in the current version will not be effective in the EU|
|IFRS 15 Revenue from Contracts with Customers with explenations to IFRS 15||The standard applies to all contracts with customers, except for those within the scope of other IFRSs (e.g. lease contracts, insurance contracts and financial instruments). IFRS 15 clarifies principles of revenue recognition.||January 1, 2018|
|IFRS 16 Leases||The standard eliminates the classification of leases as either operating or finance lease in the lessee’s accounts. All contracts which meet the criteria of lease will be recognized as finance lease.||January 1, 2019|
|Amendments to IAS 12||Clarification of the method of deferred tax asset settlement on unrealized losses.||January 1, 2017|
|Amendments to IAS 7||The initiative on changes to disclosures.||January 1, 2017|
|Amendments to IFRS 10 and IAS 28||Deals with the sale or contribution of assets between an investor and its joint venture or associate.||Has not been determined|
|Amendments to IFRS 2||Classification and measurement of share-based payment transactions||January 1, 2018|
|Amendments to IFRS 4||Application of IFRS9 Financial instruments jointly with IFRS 4 Insurance contracts||January 1, 2018|
|Annual improvements to IFRS (cycle 2014-2016)||A collection of amendments dealing with: IFRS 1 – elimination of short-term exemption for entities using IFRS for the first time; IFRS 12 – clarification of the scope of disclosure requirements; IAS 28 – valuation of entities, in which an investment has been made, at fair value through profit or loss or using an individual method.||January 1, 2018/ January 1, 2017|
|Amendments to IAS 40||Changes to the classification of properties: i.e. transfer from investment property to other groups of assets.||January 1, 2018|
|IFRIC 22 Foreign Currency Transactions and Advance Consideration||Guidelines specifying determination of the date of a transaction and related spot foreign exchange rate to be used in case foreign currency payments are made or received in advance.||January 1, 2018|
The PGE Group intends to adopt the above mentioned new standards, amendments to standards and interpretations published by the International Accounting Standards Board but not yet effective at the reporting date, when they become effective.
The influence of new regulations on future financial statements of the PGE Group
IFRS 9 Financial Instruments
The standard introduces fundamental changes in respect of classification, presentation and measurement of financial instruments. As part of IFRS 9, new model for calculating impairment will be introduced that will require more timely recognition of expected credit losses and rules for hedge accounting will be updated. These changes are intended to allow the preparers of financial statements to reflect entity’s actions more accurately.
Current analysis of the standard mentioned above indicates that possible changes may refer to the following areas:
- rules for calculating and recognition of impairment allowances concerning financial assets (change from incurred loss model to expected loss model),
- classification of financial assets,
- possible simplifications of hedge accounting.
Analysis of the impact of IFRS 9 has not been finished yet, nonetheless according to the PGE Group the standard should not have significant influence on the reported financial results.
IRFS 15 Revenue from Contracts with Customers
IFRS 15 is intended to unify and simplify principles of revenue recognition by introducing one model for revenue recognition. In particular, the standard will impact revenue recognition resulting from agreements or package agreements based on which clients are provided with separate services and/or goods.
Analysis of the impact of the standard indicates that changes may concern mainly the following areas:
- revenues from connection to the distribution network. Currently, revenues from connection fees are recognized at one time when they become due i.e. at the moment of connection. The new standard may change principles of revenue recognition from connection to the distribution network and related expenses depending on the final output of dependency analysis between connection agreement and distribution agreement concluded with the same client;
- acting as an intermediary in respect of selected, separate services and goods offered to clients on the basis of electricity or gas sale agreement, or distribution agreement. The change may result in a decrease of sales revenues and related expenses, but it will not affect the reported profit or loss;
- extending the scope of disclosures related to sales reveues.
Apart from the possible impact of changes in recognition of revenues and expenses resulting from connection to distribution network, the implementation of the standard should not significantly influence the Group’s financial statements. Analysis of the impact of the standard has not been finished yet.
IFRS 16 Lease
The new standard changes principles for the recognition of contracts which meet the criteria of a lease. The main change is to eliminate the classification of leases as either operating leases or finance leases in the lessee’s accounts. All contracts which meet the criteria of a lease will be recognized as a finance lease. Adoption of the standard will have the following effect:
- in the statement of financial position: increase of non-financial non-curent assets and financial liabilities;
- in the statement of comprehensive income: decrease of operating expenses (other than depreciation/amortization), increase of depreciation/amortization and financial expenses.
The PGE Group is in the process of analysis of IFRS 16’s impact on the future financial statements.Other standards and their changes should have no significant impact on future financial statements of the PGE Group.Amendments to standards and interpretations that entered into force in the period from January 1, 2016 to the date of publication of these consolidated financial statements did not have significant influence on these financial statements.