3. STANDARDS ISSUED BUT NOT YET EFFECTIVE
The following IFRS standards have been issued but are not yet effective.
(a) Financial Instruments: Classification and Measurement
In July 2014, the International Accounting Standards Board (“IASB”) issued the final version of IFRS 9 – Financial Instruments (“IFRS 9”), which reflects all phases of the financial instruments project and replaces IAS 39 – Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 sets out the requirements for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This single, principle-based approach replaces existing rule-based requirements and is intended to improve and simplify the reporting for financial instruments. IFRS 9 is effective for annual periods beginning on or after January 1, 2018. Retrospective application is required with certain exceptions.
Proposed amendments to IFRS 4 – Contracts were issued in December 2014 and confirmed in May 2016. The amendments propose an optional temporary exemption from applying IFRS 9 that would be available to companies whose predominant activity is to issue insurance contracts. Such a proposal permits deferral of IFRS 9 application until annual periods beginning on or after January 1, 2021 or until the new insurance contract standard becomes effective if this is an earlier date. The amendments also propose an option to apply the “overlay approach” to the presentation of qualifying financial assets, in which an entity would be permitted to remove from profit or loss and present instead in OCI, the impact of measuring financial assets at fair value through profit or loss under IFRS 9 when they would not have been so measured under IAS 39. The Company plans to use the proposed temporary exemption to defer the application of IFRS 9.
(b) Revenue from Contracts with Customers
In May 2014, the IASB issued IFRS 15 – Revenue from Contracts with Customers, which clarifies the principles for recognizing revenue and cash flows arising from contracts with customers. The standard is effective for annual periods beginning on or after January 1, 2018. The Company plans to adopt the new standard on the required effective date using the full retrospective method. The Company has performed a preliminary assessment of IFRS 15 and does not expect the standard to have a material impact on its consolidated financial statements.
In January 2016, the IASB issued IFRS 16 – Leases, which establishes principles for the recognition, measurement, presentation and disclosure of leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases, unless the lease term is twelve months or less or the underlying asset has a low value. The standard is effective for annual periods beginning on or after January 1, 2019 and is to be applied retrospectively. In 2017, the Company plans to continue its assessment of the potential effect of IFRS 16 on its consolidated financial statements.