Annual report and accounts 2023 - Flipbook - Page 147
Strategic Report
Corporate Governance
Accounts
Changes in accounting policy and disclosures
(a) New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current reporting period and the Group had to change its accounting policies as a result of adopting the
following standards:
• Property, Plant and Equipment Proceeds before Intended Use – Amendments to IAS 16;
• Onerous contracts – Cost of Fulfilling a Contract – Amendments to IAS 37;
• Annual Improvements to IFRS Standards 2018 – 2020; and
• Reference to the Conceptual Framework – Amendments to IFRS 3.
The amendments listed above do not have a material impact on the results for the current and prior reporting periods.
(b) New standards, amendments and interpretations issued but not effective for the financial year beginning 30 January 2023 and not adopted early
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 29 January 2023 reporting
periods and have not been early adopted by the Group. These standards, amendments or interpretations are not expected to have a material impact on the entity in the
current or future reporting periods or on foreseeable future transactions.
Consolidation – subsidiaries
Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from
the date over which control commences until the date on which control ceases.
On the acquisition of a business, identifiable assets and liabilities acquired are measured at their fair value. The cost of the acquisition is measured at the aggregate of the fair
values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued. Any contingent consideration is recognised at fair value at the
acquisition date and subsequently until it is settled. The cost of the acquisition in excess of the Group’s interest in the net fair value of the identifiable net assets acquired is
recorded as goodwill.
Non-controlling interests represent the portion of comprehensive income and equity in subsidiaries that is not attributable to the parent Company shareholders and is
presented separately from the parent shareholders’ equity in the Consolidated Balance Sheet.
Intercompany transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from intercompany
transactions that are recognised in net assets are also eliminated. Accounting policies of subsidiaries are consistent with those adopted by the Group.
Revenue recognition
Revenue is recognised when control of the goods has passed to the buyer. All revenue is recognised on a point of time basis being primarily the point of delivery to
customers’ sites. The majority of goods are dispatched by the Group’s own distribution network and delivery often occurs on the day of dispatch although some are a few
days later therefore revenue is recognised on delivery to the customer site. None of the Group’s contractual arrangements lead to revenue being recognised over time.
Revenue is the net invoiced sales value, after deducting promotional sales related discounts invoiced by customers, including: brand support costs; customer incentives; and
exclusive of value added tax of goods and services supplied to external customers during the year. Brand support costs are investments in customer promotional activities.
Sales are recorded based on the price specified in the sales invoices, net of any agreed discounts and rebates. Brand support accruals are included in the statement of
financial position.
Sales related discounts and rebates are calculated based on the expected amounts necessary to meet the claims of the Group’s customers in respect of these discounts and
rebates. When the Group expects to grant a discount or rebate to a customer, this is treated as variable consideration and adjustments are made to the transaction price using
the expected value method. This variable consideration is only included to the extent that it is highly probable the inclusion will not result in a significant revenue reversal in
the future.
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