Statement of compliance
These consolidated financial statements for the year ended 31 December 2016 have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU (IFRS EU). The Group applied the same accounting policies in the preparation of the financial data for the year ended 31 December 2016 and the consolidated financial statements for the year 2015, presented in the consolidated annual report, except for the EU-endorsed standards and interpretations which are effective for the reporting periods beginning on 1 January 2016.
During the year ended 31 December 2016 the following became effective:
- (i) amendments to IAS 10, IAS 12 and IAS 28 Investment entities: Applying the Consolidation Exception
- (ii) amendments to IAS 11 Accounting for acquisitions of interests in joint operations
- (iii) amendments to IAS 1 Disclosure Initiative
- (iv) amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation
- (v) amendments to IAS 27 Equity Method in Separate Financial Statements
- (vi) amendments to IAS 19 Employee Benefits
- (vii) annual improvements – 2010-2012 reporting cycle
- (viii) annual improvements – 2012-2014 reporting cycle
The amendments did not have a significant impact on these consolidated financial statements except for introducing certain new disclosures.
Standards published but not yet effective:
- (i) amendments to IAS 10 and IAS 28 Sale or contribution of assets between an investor and its associate or joint venture
- (ii) amendments to IAS 7 Disclosure Initiative
- (iii) amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses
- (iv) amendments to IFRS 2 Share-based Payment
- (v) amendments to IFRS 4: Application of IFRS 9 Financial Instruments and IFRS 4 Insurance Contracts
- (vi) IFRS 9 Financial instruments: Classification and measurement and Hedge accounting
- (vii) IFRS 15 Revenue from Contracts with Customers
- (viii) IFRS 16 Leasing
- (ix) annual improvements – 2014-2016 reporting cycle
- (x) IFRIC 22 Foreign Currency Transactions and Advance Consideration
- (xi) amendments to IAS 40 Investment property
The Group is currently analyzing the impact of the published standards that are not yet effective and assesses that they should not have a material impact on the financial statements (except for IFRS 15, IFRS 16 and IFRS 9), other than additional disclosures.
The Group assesses that IFRS 15 will have a significant impact on the financial statements due to the change in the recognition model of revenue from customer contracts. IFRS 15 will change the distribution of revenue in time and the allocation of revenue amongst the products and services. The Group assesses that the allocation of the contract price in proportion to the standalone sales price will decrease subscription revenues, increase revenues from sales of equipment and thereby result in an earlier recognition of part of the income.
The Group assesses that IFRS 16 will have a significant impact on the financial statements due to the fact that the new standard requires that the lessees recognize assets and liabilities from most of the lease agreements as well as increase the number of disclosures required in the financial statements. Presentation and recognition of costs in the income statement will be similar to the current requirements for the financial lease agreements (separate presentation of depreciation and interests costs). Implementation of IFRS 16 will increase depreciation and financial costs which will result in an increase of EBITDA, assets and liabilities (due to the recognition of a right-of-use asset and a lease liability) as well as an increase of debt ratio. The Group assesses that the agreements for base transceiver stations, satellite transponders capacity and space rental which are currently presented as operational lease may be classified as financial lease.
The Group assesses that IFRS 9 may have an impact on the financial statements due to the fact that the standard provides for a change in an approach to the classification of financial assets and introduces impairment model based on the expected losses. Implementation of the new impairment model might result in overall increase of provisions amount and potentially increase its volatility in financial statements due to the requirement to take into account both current and future events (forward-looking information), including macroeconomic forecasts.
As at the date of publication of these financial statements the Group has not completed the analysis of the impact of the new standards, IFRS 15, IFRS 16 and IFRS 9.
Other published but not yet effective standards not included above are not relevant to the Group’s operations.