Annual Report and Audited Financial Statements 2011 - The Kenya ...

Notes to the Financial Statements
for the year ended 31 Dec 2011 - Continued
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
a) Basis of preparation
The financial statements have been prepared under the historical cost convention, except as indicated otherwise
below, and are in accordance with International Financial Reporting Standards (IFRS).
(i) New and amended standards adopted by the Institute
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning
on or after 1 January 2011 that would be expected to have a material impact on the Institute.
(ii) New standards, amendments and interpretations issued but not effective for the
financial year beginning 1 January 2011 and not adopted in advance of the effective date.
IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of
financial assets and financial liabilities. IFRS 9 requires financial assets to be classified into two principal
measurement categories: 'those measured as at fair value and those measured at amortised cost. The institute is
yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than the or after 1 January 2015.
IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise
definition of fair value and a single source of fair value measurement and disclosure requirements for use across
IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair
value accounting, but provide guidance on how it should be applied where its use is already required or permitted
by other standards within IFRSs or US GAAP. The institute is yet to assess IFRS13’s full impact and intends to
adopt IFRS 13 no later than the accounting period beginning on or after 1 January 2012.
b) Key sources of estimation uncertainty
The directors have made no assumptions and there are, in their opinion, no other sources of estimation uncertainty
at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying
amount of assets and liabilities within the next financial year.
c) Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the provision of services in the
ordinary course of business and the stated net of rebates and discounts. The Institution recognises revenue when
it can be reliably measured, it is probable that future economic benefits will flow to the entity and when the specific
criteria have been met for the Institute's activities. The amount of revenue is not considered to be reliably measured
until all contingencies relating to the sale have been resolved. The Institute bases its estimates on historical results,
taking into consideration the type of customer, type of transaction and specifics of each arrangement.
i) Tuition fees are accounted for over the period to which they relate.
ii) Grants and donations are credited to profit or loss upon receipt and any unutilised funds are carried forward
as advance receipts.
Annual Report and Audited Financial Statements 2011 31