Annual Report and Accounts 2016


John Lewis Partnership plc


107


1 Accounting information


In this section In this section, we explain the basis of preparation of the Partnership’s consolidated financial statements and accounting policies which relate to the financial statements as a whole. Where an accounting policy or critical accounting estimate and judgement is specific to a particular note, it is described within that note.


This section also details new or amended accounting standards and when they are effective. We also give an explanation of the impact these accounting standards have had, or the current view of the impact they will have on the Partnership’s consolidated financial statements.


1.1 Accounting principles and policies


We prepare our financial statements under International Financial Reporting Standards (IFRS) as adopted by the European Union. This is required by the Listing Rules of the London Stock Exchange. We have set out our significant accounting policies in these notes. These have been applied in the current reporting period and apply to the financial statements as a whole. All of the Partnership’s accounting policies are set in line with the requirements of IFRS. This year we have re-stated some of our prior year balances and the reasons for this are also set out below. Other than this, there have been no changes in accounting policies in the year.


1.1.1 Basis of preparation


The financial statements are prepared under the historical cost convention, with the exception of certain land and buildings which are included at their deemed cost amounts, and financial assets and financial liabilities (including derivative instruments) which are valued at fair value through profit or loss, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.


The preparation of consolidated financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the year. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. The critical accounting estimates and judgements made by management are disclosed in section 1.1.7.


The financial period is the 52 weeks ended 30 January 2016 (prior period: 53 weeks ended 31 January 2015).


Going concern


The Directors, after reviewing the Partnership’s operating budgets, investment plans and financing arrangements, consider that the Company and Partnership have sufficient financing available at the date of this report. Accordingly, the Directors are satisfied that it is appropriate to adopt the going concern basis in preparing the Annual Report and Accounts.


1.1.2 Basis of consolidation


The consolidated Partnership financial statements incorporate the results for the Company and all its subsidiary undertakings made up to the year-end date.


1.1.3 Subsidiaries


Subsidiary undertakings are all entities over which the Partnership has control. Control exists when the Partnership has the power to direct the relevant activities of an entity so as to affect the return on investment.


All intercompany balances, transactions and unrealised gains are eliminated upon consolidation.


1.1.4 Amendments to accounting standards


The following policies have been consistently applied to all the years presented, unless otherwise stated.


The following standards, amendments and interpretations were adopted by the Partnership for the year ended 30 January 2016 and have not had a significant impact on the Partnership’s profit for the year, equity or disclosures:


a Amendments to IFRS 10, IFRS 11 and IFRS 12 ‘Transition guidance’ a Amendments to IAS 19 ‘Defined Benefit Plans: Employee contributions’ a IAS 27 (revised 2011) ‘Separate financial statements’


The following are new accounting standards and amendments to existing standards that have been published and are applicable for the Partnership’s accounting periods beginning 31 January 2016 onwards, which the Partnership has not adopted early:


a Annual improvements to IFRSs 2010-2012 Cycle – various standards a Annual improvements to IFRSs 2011-2013 Cycle – various standards


These are not expected to have a material impact on profit or equity for future years, but may affect disclosures.


The Partnership is currently assessing the impact of the following standards, which have been issued but not yet endorsed by the EU:


a Amendment to IAS 1, ‘Presentation of financial statements’ on the disclosure initiative (applicable for the period beginning 31 January 2016)


a IFRS 9 ‘Financial Instruments’ (applicable for the period beginning 28 January 2018)


a IFRS 15 ‘Revenue from Contracts with Customers’ (applicable for the period beginning 28 January 2018)


a IFRS 16 ‘Leases’ (applicable for the period beginning 26 January 2019)


In a nutshell


The notes provide a more in depth look at the detail behind our primary statements alongside some additional information not captured elsewhere.


It’s Your Results


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