Explanation of transition to IFRS
The accounting policies that have had the key impact on the income statement and balance sheet of VVO Group in transition to IFRS are described here below.
VVO Group has applied IFRS 1 First-time Adoption of International Financial Reporting Standards in the transition. The Group has elected to apply the following exemptions from the requirements in other IFRSs as allowed in IFRS 1:
- Business combinations: the Group does not apply IFRS 3 Business Combinations retrospectively to the past business combinations that occurred before the date of transition but retains instead the same classification and recognition principles of assets and liabilities as applied in the FAS consolidated financial statements.
- Interest subsidy loans: the interest subsidy loans received by VVO Group are accounted as government loans under IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. These loans have been provided by an entity representing government and they are grant by nature. In the IFRS transition VVO Group has applied the exception provided under IFRS 1. Based on the exception VVO Group has not adjusted the carrying amounts of these loans in the opening IFRS balance sheet. Subsequently VVO Group accounts for the loans in accordance with IAS 39.