NTUC Income AR 2017

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 33. NEW STANDARDS AND INTERPRETATIONS NOT ADOPTED (CONTINUED) The Group has decided that it will take the deferral approach in the amendments to FRS 104 to defer the implementation of FRS 109 until IFRS 17 is effective. The Group will then be able to perform a comprehensive assessment of the impact, taking into considerations the options available for the implementation of both standards together. The Group assessed that it has qualified for temporary exemption as the carrying amount of its liabilities arising from contracts within the scope of FRS 104 is significant compared to the total carrying amount of all its liabilities; and that the total carrying amount of its liabilities connected with insurance is above 90% of its total liabilities as at 31 December 2015. • FRS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It also introduces new cost guidance which requires certain costs of obtaining and fulfilling contracts to be recognised as separate assets when specified criteria are met. When effective, FRS 115 replaces existing revenue recognition guidance, including FRS 18 Revenue , FRS 11 Construction Contracts , INT FRS 113 Customer Loyalty Programmes , INT FRS 115 Agreements for the Construction of Real Estate , INT FRS 118 Transfers of Assets from Customers and INT FRS 31 Revenue – Barter Transactions Involving Advertising Services . FRS 115 is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. • FRS 116 eliminates the lessee’s classification of leases as either operating leases or finance leases and introduces a single lessee accounting model. Applying the new model, a lessee is required to recognise right-of-use (ROU) assets and lease liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. FRS 116 substantially carries forward the lessor accounting requirements in FRS 17 Leases . Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for these two types of leases using the FRS 17 operating lease and finance lease accounting models respectively. However, FRS 116 requires more extensive disclosures to be provided by a lessor. When effective, FRS 116 replaces existing lease accounting guidance, including FRS 17, INT FRS 104 Determining whether an Arrangement contains a Lease , INT FRS 15 Operating Leases – Incentives, and INT FRS 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . FRS 116 is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted if FRS 115 is also applied. As FRS 109, FRS 115 and FRS 116, when effective, will change the existing accounting standards and guidance applied by the Group in accounting for financial instruments, revenue and leases, these standards are expected to be relevant to the Group. For FRS 115 and FRS 116, the Group does not expect the requirements to have a material effect to the Group’s financial statements. ANNUAL REPORT 2017 NTUC INCOME INSURANCE CO-OPERATIVE LIMITED 124