Page 79 - Annual Report 2010

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Financial Statements

2.13 Leases

The leases entered into by EIF as a lessee or a lessor are operating leases under which all the risks and benefits of ownership are effectively retained by the lessor. Payments or receipts made under operating leases are recognised to the profit or loss in other administrative expenses or other operating income on a straight- line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

2.14 New standards and interpretations

not adopted

The following IFRS applicable to EIF were issued but are not yet effective. The Fund has chosen not to early adopt these standards and interpretations. The Fund plans to adopt them at the date of endorsement by the European Union. The Fund is in the process of analysing the impact of these standards on their operations as well as the date at which they plan to adopt the standards.

„„ IAS 27 – Consolidated and separate financial statements

This standard was revised following the amend-ments to IAS 21 The Effect of Changes in Foreign Exchange Rates, IAS 28 Investments in Associates

and IAS 31 Interests in Joint Ventures. It deals with the impairment of investments in subsidiaries, joint ventures and associates in separate financial state-ments. The standard is effective for financial years beginning on or after 1 January 2011.

„„ IFRS 9 – Financial instruments

This standard is the first step in a three-part project by the IASB to replace IAS 39 f inancial instru -ments. This first part, dealing with the classification and measurement of financial assets, simplifies the recognition of financial assets by requiring such as-sets to be measured at either amortised cost or fair value, depending on certain criteria. The standard is effective for financial years beginning on or after 1 January 2013, although it may be early adopted. The date of the adoption of this standard by the Fund will also be dependent on the timing of the EU endorsement process.

„„ Revised IAS 24 – Related Party disclosures This revised standard will modify requirements for entities under control, joint control or significant in-fluence of a government (“government-related enti-ties”) in respect of certain related party disclosures and will consequently require provision of certain information concerning individually or collectively significant transactions with the government or other government-related entities. This standard specifies retrospective application for annual periods on or after 1 January 2011, although it may be early adopted.