For those interested:AASB 15 Revenue from Contracts with...

For those interested:
AASB 15 Revenue from Contracts with Customers The new standard establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance,including AASB 18 Revenue. AASB 15 has been implemented. The accounting policies for the group’s revenue for contracts with customers are explained in Note 3. Significant estimates and judgements have been made in the adoption of AASB 15

AASB 16 replaces existing leases guidance, including AASB 17 Leases. The standard is effective from 1 April 2019 and the consolidated entity is not early adopting this standard. AASB 16 Leases removes the lease classification test and requires all leases (including operating leases) to be brought onto the balance sheet. The definition of a lease is also amended and is now the new on/off balance sheet test for lessees. AASB 16 is effective for annual reporting periods beginning on or after 1 January 2019. Early adoption will be permitted for entities that also adopt AASB 15 Revenue from contracts with customers. The Consolidated entity is assessing the potential impact on its financial statements resulting fromthe application of AASB 16. Determining whether an arrangement contains a leaseThe Consolidated entity has an arrangement that was not in the legal form of a lease, for which it concluded that the arrangement contains a lease of equipment under AASB 17. On transition to AASB 16, the Consolidated entity can choose whether to: – apply the AASB 16 definition of a lease to all its contracts; or – apply a practical expedient and not reassess whether a contract is, or contains, a lease. The Consolidated entity plans to apply the practical expedient to grandfather the definition of a lease on transition. This means that it will apply AASB 16 to all contracts entered into before 1 January 2019 and identified as leases in accordance with IAS 17 and AASB 17. Transition As a lessee, the Group can either apply the standard using a: – retrospective approach; or – modified retrospective approach with optional practical expedients. The lessee applies the election consistently to all of its leases. The Consolidated entity plans to apply AASB 16 initially on 1 April 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 April 2019, with no restatement of comparative information. When applying the modified retrospective approach to leases previously classified as operating leases under AASB 117, the lessee can elect, on a lease-by-lease basis, whether to apply anumber of practical expedients on transition. The consolidated entity is assessing the potential impact of using these practical expedients. The Consolidated entity is not required to make any adjustments for leases in which it is a lessor except where it is an intermediate lessor in a sub-lease. The Consolidated entity has completed an initial assessment of the potential impact on its consolidated financial statements but has not yet completed its detailed assessment. The actual impact of applying AASB 16 on the financial statements in the period of initial application will depend on future economic conditions, including the Consolidated entity’s borrowing rate at 1 April 2019, the composition of theConsolidated entity’s lease portfolio at that date, the Consolidated entity’s latest assessment of whether it will exercise any lease renewal options and the extent to which the Consolidated entity chooses to use practical expedients and recognition exemptions. So far, the most significant impact identified is that the consolidated entity will recognise new assets and liabilities for its operating leases of warehouse and factory facilities. As at 31 March 2019, the consolidated.

entity’s future minimum lease payments under non-cancellable operating leases amounted to $19,684,000 on an undiscounted basis (see note 7). Under AASB16, the Group would recognise a right of use asset and lease liability in therange of $11,000,000 to $18,000,000. The right of use asset will be subject to further impairment consideration yet to be undertaken.

In addition, the nature of expenses related to those leases will now change as AASB 16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities. No significant impact is expected for the consolidated entity’s finance leases.

eclassification of comparative financial information During the period, the classification of transactions were reviewed and certain reclassifications were made to financial statement line items to enhance presentation. The comparative information in the statement of profit or loss and other comprehensive income, statement of financial position, segment note and statement of cash flow have been reclassified consistent with the presentation adopted in the 31 March 2019 financial statements. - Stock on hand had been accounted for as rental assets. This classification has now been adjusted to inventory which resulted in an increase in the value of stock on hand or inventory from $6,979,000 to $11,376,000, an increase in cost of sales of $4,628,000 and a reduction in rental asset depreciation from $6,204,000 to zero. Opening retained earnings increased by $2,822,000. As result of this change we removed the rental asset note and operating lease as lessor note. - Software balances under development, worth $923,000 have been reclassified from property, plant and equipment to intangible assets. This change has been reflected in the comparative of the Statement of financial position and the note 8 Intangible assets. - Payments arising from the strategic alliance with Cashflow IT of $923,000 has been reclassified from other expenses to revenue, as this better reflects the substance of the payments under the terms of the alliance. This change has been reflected in the comparative of the Statement of profit and loss and other comprehensive income and the note 2 Operating Segments. AASB 139 AASB 9 Measurement Category Carrying Amount $’000 AUD Measurement Category Carrying Amount $’000 AUD Financial Assets Cash and cash equivalents Amortised cost 28,227 Amortised cost 28,227 Trade and other receivables Amortised cost 489,235 Amortised cost 471,990 Financial Liabilities Derivatives FVTPL 542 FVTPL 542 Loans and borrowings Amortised cost 284,308 Amortised cost 284,308 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 March 2019 30 I Thorn Group - Derivative financial instruments have been grossed up for tax with the tax impact of $163,000 recognised in deferred tax liabilities in the Statement of financial position. The derivative financial instruments has also been reclassified from other payables to its own caption, and to shifted to a non-current classification, reflecting the term of the underlying instrument. - Thorn Business Finance customer accounts contain some credits which have been netted against the outstanding receivable to better reflect the net outstanding principal balance, resulting in a reduction of $3,065,000 to Trade and other receivables, and were previously disclosed in other payables. This has also impacted Note 2 operating segments. - The segment note has been adjusted to place finance expenses and the balance of the securitised warehouse facility against Business Finance as they relate to that division. This has resulted in an interest expense of $9,941,000 and the facility liability balance of $243,308,000 being reallocated to Business Finance from Corporate. - Past issues of shares totalling $2,849,000 have been reclassified from reserves to share capital in the opening Statement of Financial Position and the opening Statement of Changes in Equity. - Radio Rentals had accounted for rent free incentive periods by capitalising these amounts and amortising against other comprehensive revenue in the statement of comprehensive income. It is now being expensed upfront against sales revenue. Other comprehensive revenue has been adjusted by eliminating amortisation of $5,564,000 and including a reduction in sales revenue of $4,452,000. The rent free deferred cost of $8,682,000 has been reduced against opening retained earnings. This has also impacted Note 2 operating segments. - Where Radio Rentals had replaced or repaired an item on rent that was damaged due to fault of the customer, the replacement good value or repaired costs was charged over a lease term agreed with the customer in addition to the original amounts owing. This had been recognised on a cash basis with no receivable taken up. Other revenue has been increased by $117,000 and a receivable balance of $412,000 included in lease receivable. This has also impacted Note 2 operating segments. - Establishment fees had previously been included in other revenue up front rather than amortised over the period of the lease. Other comprehensive income has been reduced by $185,000 and lease receivables have been reduced by $1,217,000. This has also impacted Note 2 operating segments. - Promotional customer gift cards had been capitalised and amortised as an offset to other revenue over the average lease duration. This has now been adjusted as an immediate write off to finance lease cost of sales that resulted in an additional $597,800 expense. Prepayments and other assets reduced by $597,800. - Radio Rentals at times will forgive of customer arrears in order to retain their custom. This had been included as a reduction to other revenue. This has now been expensed to impairment losses on loans and receivables. Other revenue and impairment expenses have both increased by $838,400. - Costs of $1,156,000 incurred as part of customers changing the finance lease model their contract is under, have been reclassified from impairment losses on loans and receivables to Revenue in the Statement of Profit and Loss and Other Comprehensive Income and note 2 Operating segments as these changes do not relate to impairment losses. - Prepayments and other assets of $3,168,000 have been reclassified into its own line in the face of the balance sheet. This have also impacted Note 5 trade and other receivables. - Radio Rental had accounted for supplier rebates as other revenue, this has been adjusted to reduce other revenue by $1,513,000 and finance lease cost of goods sold decreased by $1,513,000. - Early termination fees charged on disconnection of leases prior to the expiry of the contracted lease term were accounted for as a charge against revenue. An amount of $360,000 has been transferred as a recovery to impairment expense