My first Publication ocbc_ar17_fullreport_english | Page 270

NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2017
50. FULL CONVERGENCE WITH INTERNATIONAL FINANCIAL REPORTING
STANDARDS AND ADOPTION OF NEW ACCOUNTING STANDARDS
AND INTERPRETATIONS
50.1 APPLICABLE TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2018
In 2014, the Accounting Standards Council (“ASC”) announced that Singapore-incorporated companies that have issued, or are in the
process of issuing, equity or debt instruments for trading on the Singapore Exchange, will apply a new financial reporting framework
identical to the International Financial Reporting Standards (“IFRS”) with effect from annual periods beginning on or after 1 January
2018, with the objective to achieve full convergence with IFRS. Subsequently, the ASC issued Singapore Financial Reporting Standards
(International) (“SFRS(I)”) in 2017 for local implementation. SFRS(I) are equivalent of the International Financial Reporting Standards.
The Group’s financial statements for the financial year ending 31 December 2018 will be prepared in accordance with SFRS(I). On initial
implementation of SFRS(I), the Group will be required to apply the specific transition requirements in SFRS(I) 1 First-time Adoption of
Singapore Financial Reporting Standards (International). In this regard, the date of transition to SFRS(I) for the Group is 1 January 2017,
unless otherwise stated.
In addition, the following new SFRS(I)s, amendments to and interpretations of SFRS(I) will also be applied:
FRS
SFRS(I) 9
SFRS(I) 15
SFRS(I) 1-28 (Amendments)
SFRS(I) 1-40 (Amendments)
SFRS(I) 2 (Amendments)
SFRS(I) 4 (Amendments)
SFRS(I) INT 22
Title
Financial Instruments
Revenue from Contracts with Customers
Measuring an Associate or Joint Venture at Fair Value
Investment Property: Transfers of Investment Property
Share-based Payment: Classification and Measurement of Share-based Payment Transactions
Insurance Contracts: Applying SFRS(I) 9 Financial Instruments with SFRS(I) 4 Insurance Contracts
Foreign Currency Transactions and Advance Consideration
Based on the Group’s preliminary analysis, the initial application of the above standards (including their consequential amendments) and
interpretations are not expected to have a significant impact on the Group’s financial statements, except for SFRS(I) 1 and SFRS(I) 9.
(I) SFRS(I) 1
SFRS(I) 1 generally requires that the Group applies SFRS(I) on a retrospective basis, as if the accounting standards had always been
applied. If there are changes to accounting policies arising from new or amended standards effective in 2018, restatement of
comparatives may be required as SFRS(I) 1 requires both the opening balance sheet and comparative information to be prepared using
the new accounting policies.
To provide transitional relief from full retrospective application for a first-time adopter, SFRS(I) 1 provides certain mandatory exceptions
and optional exemptions from retrospective application, which are often different from the transitional provisions of individual SFRS(I)s.
Except as described below, the Group does not expect the application of the mandatory exceptions and the optional exemptions in
SFRS(I) 1 to have any significant impact on the financial statements.
Foreign currency translation reserves (“FCTR”)
The Group plans to elect the optional exemption in SFRS(I) 1 to reset its cumulative FCTR for all foreign operations to nil at the
date of transition, as permitted by the accounting standards. The cumulative FCTR of $0.9 billion recognised by the Group (Bank:
$0.1 billion), which was determined in accordance with the Singapore Financial Reporting Standards, will be reclassified from FCTR
to Unappropriated Profit within Revenue Reserves. After the date of transition, any gain or loss on disposal of any foreign operations
will exclude translation differences that arose before the date of transition.
268
OCBC ANNUAL REPORT 2017