5. Effects of New Accounting Standards

IFRIC 21 Levies

The interpretation published in May 2013 clarifies when a company should recognise a liability to pay a levy imposed by the respective authorities. The interpretation is mandatory for financial years beginning on or after 17 June 2014. The HHLA Group holds significant property and is therefore subject to property tax, a levy within the meaning of IFRIC 21. The test to determine whether and when a liability must be recognised for property tax did not have any impact on HHLA’s Consolidated Financial Statements. There is no obligation to pay property tax as of the reporting date since the financial year corresponds to the calendar year.

Improvements to
IFRS 2011–2013 Cycle

The annual round of improvements published in December 2013 affects the following standards: IFRS 1 First-time Adoption of IFRS, IFRS 3 Business Combinations, IFRS 13 Fair Value Measurement and IAS 40 Investment Property. The amendments apply to reporting years which begin on or after 1 July 2014. IFRS 3, IFRS 13 and IAS 40 were adopted into European law with Commission Regulation No 2014/1361 of 18 December 2014. These were therefore applied by HHLA in financial year 2015; there was no effect on the Consolidated Financial Statements.

IFRS 9
Financial Instruments

IFRS 9 Financial Instruments was finalised by the IASB in July 2014. This standard aims to simplify the requirements for reporting financial instruments in the balance sheet. Adoption is expected to be mandatory for financial years which begin on or after 1 January 2018. Early adoption is permitted. The impact of IFRS 9 on HHLA’s Consolidated Financial Statements is currently being examined.

IFRS 15
Revenue from Contracts with Customers

The IASB adopted the IFRS 15 standard, Revenue from Contracts with Customers, in May 2014. This stipulates the amount and timing of revenue reporting and what information must be disclosed. It replaces the existing guidelines on revenue recognition, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes. The amendment to IFRS 15 published in September 2015 postponed the effective date from 1 January 2017 to financial years beginning on or after 1 January 2018, subject to adoption into EU law. As a general rule, initial application is retrospective, although various simplification options are available; early adoption is still permitted. The HHLA Group cannot yet conclusively determine the effects of the initial application of the standard.

IFRS 16
Leases

The IASB published IFRS 16 Leases in January 2016. This standard supersedes the previously valid IAS 17 Leases and introduces significant accounting changes for lessees. As a general rule, all leases must now be recognised using the right of use approach. Under IFRS 16, lessors will continue to classify leases as operating or finance in line with IAS 17. The new rules aim to help improve the transparency of financial reporting and break down existing information imbalances. The effective date is 1 January 2019. Earlier adoption is permitted if IFRS 15 Revenue from Contracts with Customers is already applied. The HHLA Group cannot yet conclusively determine the effects of the initial application of the standard.

Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The IASB approved amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures in September 2014. These clarify how unrealised gains from transactions between an investor and a joint venture or an associate should be reported. The EFRAG announced in February 2015 that the process of endorsing these amendments had been suspended for the time being because inconsistencies had been identified between the amended standard and the existing IAS 28. The effective date – previously 1 January 2016 – has been postponed indefinitely until the inconsistencies have been resolved.

Amendments to
IAS 16 and IAS 41

Agriculture:
Bearer Plants

Amendments to
IFRS 10, IFRS 12 and IAS 28

Investment Entities:
Applying the Consolidation Exception

IFRS 14

Regulatory Deferral Accounts

Amendments to IAS 27

Equity Method in Separate Financial Statements