Naspers Limited – Annual report – 31 March 2018
- PRINCIPAL ACCOUNTING POLICIES (extract)
(u) Recently issued accounting standards (extract)
(3) IFRIC 22 Foreign Currency Transactions and Advance Consideration
IFRIC 22 Foreign Currency Transactions and Advance Consideration (IFRIC 22) clarifies the accounting for non-monetary assets and liabilities arising from the payment or receipt of advance consideration in a foreign currency. IFRIC 22 determines that these items (typically prepaid expenses and deferred revenue) should not be retranslated to the reporting entity’s functional currency after initial recognition. The group will apply IFRIC 22 from 1 April 2018 on a prospective basis.
The group currently retranslates certain foreign currency prepaid expenses and deferred revenue balances after initial recognition. With effect from 1 April 2018, the group will no longer retranslate these items after initial recognition. The group expects the initial application of IFRIC 22 to have an impact on foreign exchange gains or losses recognised from the 2019 financial year. The impact on affected non-monetary assets and liabilities as at 1 April 2018 will be recognised as an adjustment to the opening balance of retained earnings and the group estimates that the total adjustment will be a debit (reduction) of retained earnings of less than US$25m.