Annual Report 2016/17

THE AMERICAN CLUB

NOTES TO FINANCIAL STATEMENTS 30 June 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Adoption of New and Revised Standards - On 1 July 2016, the Club adopted all the new and revised FRSs and Interpretations of FRS (“INT FRSs”) that are effective from that date and relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Club’s accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRS that are relevant to the Club were issued but not effective:

• FRS 109 Financial Instruments 1 • FRS 115 Revenue from Contracts with Customers 1 • FRS 116 Leases 2

1 Applies to annual periods beginning on or after 1 January 2018, with early application permitted. 2 Applies to annual periods beginning on or after 1 January 2019, with earlier application permitted if FRS 115 is adopted.

The General Committee anticipates that the adoption of these FRSs and amendments to FRS that were issued but effective only in future periods will not have a material impact on the financial statements of the Club in the period of their initial adoption. Financial instruments - Financial assets and financial liabilities are recognised on the Club’s statement of financial position when the Club becomes a party to the contractual provisions of the instrument. The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest basis for debt instruments other than those financial instruments at fair value through profit or loss. Effective interest method

34 2016/17 ANNUAL REPORT