Commentary
 
Accounting policies >
for the year ended 30 September 2008 		 
     
     
   

ACCOUNTING POLICIES
The consolidated financial statements, comprising Reunert, its subsidiaries, joint ventures and associates (together referred to as “the group”), incorporate the following principal accounting policies, set out below.

STATEMENT OF COMPLIANCE
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations of those standards as issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB, the requirements of the JSE Limited and the requirements of the Companies Act, Act 61 of 1973, as amended.

During the current financial year, the group has adopted IFRS 7 – Financial Instruments: Disclosures which is effective from 1 October 2007, and the consequential amendments to IAS 1 – Presentation of Financial Statements.

The impact of the adoption of IFRS 7 has been to expand the disclosures regarding the group’s financial instruments.

At the date of these financial statements, the following standards and interpretations were in issue but not yet effective:
 
Standards and interpretations   Details of amendment   Effective for
annual periods
beginning on
or after
IFRS 1 –   First time Adoption of International
Financial Reporting Standards		   Measurement of the cost of investments in subsidiaries, jointly controlled entities and associates when adopting IFRS for the first time   1 January 2009
IFRS 2 –   Share-based Payment   Amendments to vesting conditions and cancellations   1 January 2009
IFRS 3 –   Business Combinations   Amendments to accounting for business combinations   1 July 2009
IFRS 5 –   Non-current Assets Held for Sale and Discontinued Operations   Plan to sell the controlling interest in a subsidiary   1 July 2009
IFRS 7 –   Financial Instruments: Disclosures   Presentation of finance costs   1 January 2009
IFRS 8 –   Operating Segments   New standard on segment reporting   1 January 2009
IAS 1 –   Presentation of Financial Statements   Amendments to structure of financial statements
Current/non-current classification of derivatives		   1 January 2009
IAS 8 –   Accounting Policies, Changes in
Accounting Estimates and Errors		   Status of implementation guidance   1 January 2009
IAS 10 –   Events after the Reporting Period   Dividends declared after the end of the reporting period   1 January 2009
IAS 16 –   Property, Plant and Equipment   Recoverable amount   1 January 2009
        Sale of assets held for rental    
IAS 18 –   Revenue   Costs of originating a loan   1 January 2009
IAS 19 –   Employee Benefits   Curtailments and negative past service costs   1 January 2009
        Plan administration costs    
        Replacement of term ‘fall due’    
        Guidance on contingent liabilities    
IAS 20 –   Accounting for Government Grants
and Disclosure of Government Assistance		   Government loans with a below-market rate of interest
Consistency of terminology with other IFRSs		   1 January 2009
IAS 23 –   Borrowing Costs   Amendment requiring capitalisation model only   1 January 2009
        Components of borrowing costs    
IAS 27 –   Consolidated and Separate Financial Statements   Amendment dealing with measurement of the cost of investments when adopting IFRS for the first time   1 July 2009
        Consequential amendments from changes to business combinations    
        Measurement of subsidiary held for sale in separate financial statements    
IAS 28 –   Investments in Associates   Consequential amendments from changes to business combinations   1 January 2009
        Required disclosures when investments in associates are accounted for at fair value through profit or loss    
        Impairment of investment in associate    
IAS 29 –   Financial Reporting in   Description of measurement basis in financial statements   1 January 2009
    Hyperinflationary Economies   Consistency of terminology with other IFRSs    
IAS 31 –   Interests in Joint Ventures   Consequential amendments from changes to business combinations   1 January 2009
        Required disclosures when interest in jointly controlled entities are accounted for at fair value through profit or loss    
IAS 32 –   Financial Instruments: Presentation   Certain financial instruments will be classified as equity whereas, prior to these amendments, they would have been classified as financial liabilities   1 January 2009
IAS 34 –   Interim Financial Reporting   Earnings per share disclosures in interim financial reports   1 January 2009
IAS 36 –   Impairment of Assets   Disclosure of estimates used to determine recoverable amount   1 January 2009
IAS 38 –   Intangible Assets   Advertising and promotional activities   1 January 2009
        Unit of production method of amortisation    
IAS 39 –   Financial Instruments: Recognition and Measurement   Reclassification of derivatives into or out of the classification at “fair value through profit or loss”
Designation and documenting hedges at the segment level
Applicable effective interest rate on cessation of fair value hedge accounting		   1 January 2009
IAS 39 –   Financial Instruments: Recognition   Clarifies hedge accounting issues:   1 July 2009
    and Measurement   – Inflation in a financial hedged item    
        – A one-sided risk in a hedged item    
IAS 40 –   Investment Property   Property under construction or development for future use as investment property   1 January 2009
        Consistency of terminology with IAS 8    
        Investment property held under lease    
IFRIC 12 –   Service Concession Arrangements   Interpretation   1 January 2008
IFRIC 13 –   Customer Loyalty Programmes   Interpretation   1 July 2008
IFRIC 14 –   IAS 19 – The limit on a Defined   Interpretation   1 January 2008
    Benefit Asset, Minimum Funding        
    Requirements and their Interaction        
 
   

The impact of the adoption of the above standards and interpretations has not yet been determined.

BASIS OF PREPARATION
The consolidated financial statements are presented in rand, which is the currency in which the majority of the group’s transactions are denominated. The consolidated financial statements have been prepared on the going concern and historical cost or fair value bases under IFRS.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from the estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of IFRS that may have a significant effect on the financial statements, and estimates with a significant risk of material adjustment in the following year, are disclosed at the end of these policies.

The accounting policies set out below have been applied, in all material respects, consistently by all group entities to all periods presented in these consolidated financial statements.
 
 
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