30 AVESCOGROUPPLC ANNUAL REPORT 2009
www.avesco.com
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 30 SEPTEMBER 2009
1. General information
Avesco Group plc (‘the Company’) and its subsidiaries (together ‘the Group’) is an international media services business. The Group has subsidiaries around the
world and sells in the UK, the US, Europe, China, Singapore, Dubai and Australia.
The Company is a public limited company which is listed on AIM and is incorporated and domiciled in the UK. The address of its registered office is Unit E2,
Sussex Manor Business Park, Gatwick Road, Crawley, West Sussex, RH10 9NH.
The registered number of the Company is 01788363.
2. Accounting policies
2.1 Basis of preparation
The annual report and financial statements of Avesco Group plc have been prepared in accordance with IFRS as adopted by the European Union, IFRIC
interpretations, the Companies Act 2006 applicable to Companies reporting under IFRS and the AIM rules for companies. The annual report and financial
statements have been prepared under the historic cost convention as modified by available for sale financial assets and financial assets and financial liabilities at
fair value through profit or loss.
The annual report and financial statements have been prepared on a going concern basis in accordance with the Group’s accounting policies set out below
which are based on the recognition and measurement principles of IFRS.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.
(a) Standards, amendments and interpretations to existing standards that are effective in 2009
IFRIC 14 - IAS 19 – ‘The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction’ (effective for annual periods beginning on or after 1
January 2008). IFRIC 14 provides guidance on the amount of pension scheme surpluses that companies can include as a defined benefit asset in their balance
sheets and also situations when a funding requirement, including the UK scheme specific funding, may give rise to additional liabilities. Adoption of this standard
has no impact on the Group or Company’s financial statements.
(b) Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group
IAS 1 (revised). ‘Presentation of financial statements’ (effective from 1 January 2009). The revised standard prohibits the presentation of items of income and
expenses (that is, ‘non-owner changes in equity’) in the statement of changes in equity, requiring ‘non-owner changes in equity’ to be presented separately from
owner changes in equity in a statement of comprehensive income. As a result the Group presents in the consolidated statement of changes in equity all owner
changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. Comparative information
has been re-presented so that it also is in conformity with the revised standard. As the change in accounting policy only impacts presentation aspects, there is no
impact on earnings per share. The Group and Company will apply IAS 1 from 1 October 2009.
IAS 1 (amendment), ‘Presentation of financial statements’ (effective from 1 January 2009). The amendment is part of the IASB’s annual improvements project
published in May 2009. The amendment provides clarification that the potential settlement of a liability by the issue of equity is not relevant to its classification as
current or non current. By amending the definition of current liability, the amendment permits a liability to be classified as non current (provided that the entity has
an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the
entity could be required by the counterparty to settle in shares at any time. The changes are not expected to have a material impact on the Group or Company’s
financial statements. The Group and Company will apply IAS 1 from 1 October 2009 subject to endorsement by the EU.
IAS 23 (amendment), 'Borrowing costs' (effective from 1 January 2009). It requires an entity to capitalise borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option
of immediately expensing those borrowing costs will be removed. The Group and Company will apply IAS 23 (amendment) retrospectively from 1 October 2009.
IAS 23 (amendment), 'Borrowing costs' (effective from 1 January 2009). The amendment is part of the IASB’s annual improvements project published in May 2008.
The definition of borrowing costs has been amended so that interest expense is calculated using the effective interest method defined in IAS 39 'Financial
instruments: Recognition and measurement’. This eliminates the inconsistency of terms between IAS 39 and IAS 23. The Group and Company will apply the IAS
23 (amendment) prospectively to the capitalisation of borrowing costs on qualifying assets from 1 October 2009.
IAS 27 (revised), 'Consolidated and separate financial statements', (effective from 1 July 2009). The revised standard requires the effects of all transactions with
non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The
standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in
profit or loss. The changes are not expected to have a material impact on the Group or Company’s financial statements. The Group and Company will apply IAS
27 from 1 October 2009.
IAS 36 (amendment), 'Impairment of assets', (effective from 1 January 2009). The amendment is part of the IASB’s annual improvements project published in May
2008. Where fair value less costs to sell is calculated on the basis of discounted cash flows, disclosures equivalent to those for value-in-use calculation should be
made. The Group and Company will apply the IAS 36 (amendment) and provide the required disclosure where applicable for impairment tests from 1 October 2009.
IAS 38 (amendment), ‘Intangible Assets’ (effective from 1 January 2009). The amendment is part of the IASB’s annual improvements project published in April 2009
and the Group and Company will apply IAS 38 (amendment) from the date IFRS 3 (revised) is adopted. The amendment clarifies guidance in measuring the fair
value of an intangible asset acquired in a business combination and it permits the grouping of intangible assets as a single asset if each asset has similar useful
economic lives. The changes are not expected to have a material impact on the Group or Company’s financial statements. The Group and Company will apply
IAS 38 from 1 October 2009.
IAS 39 (amendment), 'Financial instruments: Recognition and measurement' (effective from 1 January 2009). The amendment is part of the IASB’s annual
improvements project published in May 2008.
> This amendment clarifies that it is possible for there to be movements into and out of the fair value through profit or loss category where a derivative
commences or ceases to qualify as a hedging instrument in cash flow or net investment hedge.
> When remeasuring the carrying amount of a debt instrument on cessation of fair value hedge accounting, the amendment clarifies that a revised effective
interest rate (calculated at the date fair value hedge accounting ceases) are used.
The Group and Company will apply the IAS 39 (amendment) from 1 October 2009. It is not expected to have an impact on the Group or Company's income statement.
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