MS AR 2018 (1)

New standard - IFRS 15 - Revenue from Contracts with Customers
(Effective for annual periods beginning on or after 1 July 2018)
IFRS 15 replaces the previous revenue standards: lAS 18 Revenue, lAS 11 Construction Contracts, and the related
interpretations on revenue recognition. IFRS 15 introduces a single five-step model for revenue recognition and
establishes a comprehensive framework for recognition of revenue from contracts with customers based on a
core principle that an entity should recognise revenue representing the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. The Company has yet to assess the full impact of this standard on its financial
statements.
New standard - IFRS 16 - Leases
(Effective for annual periods beginning on or after 1 January 2019)
IFRS 16 replaces the previous lease standard: IAS 17 Leases. It will result in almost all leases being recognised
on the statement of financial position, as the distinction between operating and finance leases is removed. Under
the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised.
The only exceptions are short-term and low value leases. The Company has yet to assess the full impact of this
standard on its financial statements.
Amendments to IFRS 9 - Financial Instruments - Prepayment Features with Negative Compensation
(Effective for annual periods beginning on or after 1 January 2019)
The amendments cover three accounting areas:
(a) changes regarding symmetric prepayment options; and
(b) clarification regarding the modification of financial liabilities.
The amendments are not likely to have any material impact on Company’s financial statements, other than
increased disclosures, if any.
Amendments to IAS 19 - Employee Benefits - Plan Amendments, Curtailments, and Settlements
(Effective for annual periods beginning on or after 1 January 2019)
The amendments cover the following areas:
(a) If a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and
the net interest for the period after the remeasurement are determined using the assumptions used for the
remeasurement.
(b) In addition, amendments have been included to clarify the effect of a plan amendment, curtailment or
settlement on the requirements regarding the asset ceiling.
The amendments are not likely to have any material impact on Company’s financial statements.
Annual improvements to IFRSs 2015-2017 Cycle
(Effective for annual periods beginning on or after 1 January 2019)
The amendment to IAS 12 clarifies that the requirements in the former paragraph 52B (to recognise the income tax
consequences of dividends where the transactions or events that generated distributable profits are recognised)
apply to all income tax consequences of dividends by moving the paragraph away from paragraph 52A that only
deals with situations where there are different tax rates for distributed and undistributed profits.
The amendment to IAS 23 clarifies that if any specific borrowing remains outstanding after the related asset is
ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when
104 MUGHAL IRON & STEEL INDUSTRIES LIMITED