Naspers Limited – Annual report – 31 March 2019
2. 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 that non-monetary assets and liabilities arising from the payment/receipt of advance consideration (e.g. prepaid expenses and deferred revenue) are not retranslated to the entity’s functional currency after initial recognition. The group applied IFRIC 22 on a prospective basis, with the impact of adoption recognised as an adjustment to the opening balance of retained earnings as at 1 April 2018.
The impact of adoption was an increase in prepaid expenses of US$10m, a decrease in deferred revenue of US$4m and a corresponding increase of US$14m in retained earnings. The adoption impact related primarily to the group’s video-entertainment business, which has been presented as a discontinued operation (refer to note 4), as the application of IFRIC 22 did not have a significant impact on the group’s other operations.