Page 88 - Restamax Plc Annual Report 2017

eration received for the issue. If the company buys back its is examining the clarifications in connection with the
equity instruments, the acquisition cost of the instruments introduction of the IFRS 15 standard.
is deducted from equity.
· On 1 January 2018, Restamax will adopt the IFRS
Dividend distribution 9 Financial Instruments standard. IFRS 9 Financial
Instruments and the amendments thereto replace the
Liability for dividend distribution to the Group’s share- current IAS 39 standard. The new standard includes
holders is recorded for the period during which the general renewed guidelines for the recognition and measure-
meeting approved the distribution of dividends. ment of financial instruments. This also covers the
new accounting process model concerning expected
New and revised standards and interpreta- credit losses, to be applied to determine the impair-
tions to be applied later ment recorded for financial assets. The most significant
impact of the adoption of IFRS 9 is caused by the new
IASB has published the following new and revised credit loss model. The new model is based on expected
standards that the Group has not yet applied. The Group credit losses, whereas the current model is based on
will be applying them starting from the effective date realised credit losses. This results in the growth of the
of each standard or interpretation, or, whenever the credit loss provision upon the implementation of the
effective date is not the first day of the financial period, new guidelines. IFRS 9 contains a procedure, simplified
starting from the financial period following the effective from the general credit loss model, for trade receiva-
date. (* The amendments have not yet been approved bles, and for asset items which are based on customer
for application within the EU.) contracts. According to this, the credit loss provision is
recorded over the period of validity of the entire asset
· IFRS 15 Revenue from Contracts with Customers item to the amount of the expected credit losses, when
(effective in the EU for financial periods beginning on the financial asset is recorded on the balance sheet for
or after 1 January 2018). IFRS 15 defines a single revenue the first time. A majority of Restamax’s financial assets
recognition model according to which a company must falling within the sphere of the new credit loss model are
apply for the recognition of all customer contracts. The processed in accordance with the simplified procedure
customer is a party that has entered into a contract with described above, with the help of a provision matrix.
the company to receive goods and services produced With the adoption of the new credit loss model, an
by the company’s normal operations in exchange for adjustment of MEUR 0.6 will be recorded in the opening
a compensation. The basic principle of the standard is balance of equity on 1 January 2018.
that the company must recognise revenue in such a way
that they entries describe the provision of the promised · IFRS 16 Leases was published in January 2016 (effective
goods and services to the customer, and the monetary for financial periods beginning on or after 1 January
amount must reflect the compensation to which the 2019). IFRS 16 establishes the requirements for recog-
company expects to be entitled in exchange for the goods nition, measurement, presentation and disclosure of
and services in question. The standard contains a signif- leases. According to the standard, all leases of the lessee
icant number of requirements concerning notes. IFRS are processed in the same way such that the lessee
15 replaces the present standards concerning revenue records the asset items and liabilities of all leases on the
recognition IAS 18 Revenue and IAS 11 Construction balance sheet, unless the rental period is 12 months or
contracts and their related interpretations. The Group’s shorter, or unless the value of the leased property is low.
payment obligations consist of the supply of hired The lessors further categorise the leases into finance
labour, individual goods and services in restaurants and leases and other leases. The implementation of the new
sales revenue from advertising and marketing facilities. standard will affect how leases are presented in the
Primarily, the Group’s restaurant business is retail trade, consolidated financial statements.
and labour hire is hour-based service activity. In the
Group’s franchise business, the contractual party makes The standard will have a material impact on Restamax
an initial payment at the beginning of the contrac- Plc’s consolidated financial statements, and it will
tual relationship. According to the Group’s analysis, significantly change the Group’s operative EBITDA
under the IFRS 15 standard the initial payment from a level. At the same time, the new recording practice
franchise contract should be recognised throughout the will result in the deterioration of the Group’s equity
contractual period, which is five years in all contracts. As ratio. Restamax Plc will not adopt the standard before
a result of the introduction of the new credit loss model, 1 January 2019. Restamax Plc will adjust the reference
the adjustment to be recorded in the opening balance of figures to meet the requirements of the standard. In the
accumulated earnings on 1 January is not material. 2017 financial statements, the Group has some MEUR 73
of lease liabilities
· Clarifications IFRS 15 Revenue from Contracts with
Customers* (effective for financial periods beginning on No other already published but not yet valid new
or after 1 January 2018) was published in April 2016. The standard, standard revision or IFRIC interpretation is
clarifications give additional guidance (a) for the recog- expected to have an impact on the Group’s reporting.
nition of contractual obligations, (b) for the assessment
of the client-agent relationship and (c) for the appli-
cation of licensing. The clarifications are not expected
to have a significant impact on the Group. The Group

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