Annual Report and Accounts 2009-10 - Welfare Reform impact ...

In the current year the FReM included early adoption of revisions to IFRS 8:
Operating Segments (as revised in April 2009, effective from 1 January
2010) and, as explained in note 2(o), this has not had a significant effect
on the ILF’s financial statements. The following IFRSs, interpretations
and amendments applicable to the ILF have been issued but are not yet
effective and have not been adopted early by the ILF:
IAS 24 Related Party Transactions (effective 1 January 2011) – The amendment
provides exemption for full disclosure of transactions with state-controlled
entities and is not expected to impact on the current exemption within
the FReM. IAS 24 also extends the definition of a related party to include
relationships where joint control exists.
IFRS 9 Financial Instruments: Classification and Measurement: (effective
1 January 2013) – IFRS 9 is a replacement for IAS 39 and introduces new
requirements for the classification and measurement of financial assets,
together with the elimination of two categories. The Standard does not
include financial liabilities. Further proposals are to be introduced during
2010 and the ILF will undertake an assessment of the impact of IFRS 9
once these are known.
In addition, the FReM for 2010-11 includes other changes, of which one is
expected to affect ILF being the removal of Cost of Capital charging (see
notes 2(l) and 7). This will affect the Net Expenditure Account (which for
2009-10 currently includes a credit for £50,000) and the Statement of
Changes in Taxpayers’ Equity (where that sum is reversed).
Where the FReM permits a choice of accounting policy, the accounting
policy which is judged to be most appropriate to the particular circumstances
of the ILF for the purpose of giving a true and fair view has been selected.
The particular policies adopted by the ILF are described below. They have
been applied consistently in dealing with items that are considered material
to the accounts.
a) Accounting convention
These accounts have been prepared under the historical cost convention
modified for the revaluation of non-current assets.
77 Annual Report and Accounts 2009-10