IGO Interactive Annual Report 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2019 Notes to the consolidated financial statements 30 June 2019 (continued) 30 Summary of significant accounting policies (continued) (a) New and amended standards and interpretations adopted by the Group (continued) Application of AASB 118 $'000 AASB 15 adjustments $'000 30 June 2019 $'000 Impact of disclosures the year ended 30 June 2019 Revenue - sale of products 778,620 13,917 792,537 Revenue - shipping and insurance services - 5,336 5,336 Other revenue - provisional pricing adjustments - (19,253) (19,253) 778,620 - 778,620 As previously reported under AASB 118 $'000 AASB 15 adjustments $'000 30 June 2018 $'000 Impact on disclosures for the year ended 30 June 2018 Revenue - sale of products 765,687 (28,342) 737,345 Revenue - shipping and insurance services - 4,668 4,668 Other revenue - provisional pricing adjustments - 23,674 23,674 765,687 - 765,687 Under AASB 118 Revenue, the Group recognised the total contract revenue when there was persuasive evidence indicating that there had been a transfer of risks and rewards to the customer, typically on the bill of lading date when concentrate was delivered to the ship, including the related shipping and insurance costs. On adoption of AASB 15, the shipping and insurance service represents a separate performance obligation, and are recognised separately from the sale of the concentrate over the period the shipping and insurance service is provided. As explained in the new revenue accounting policy above, the Group’s sales contracts may provide for provisional pricing of sales at the time the product is delivered to the vessel with final pricing determined using the quotational period of the month of the vessel’s arrival to the port of discharge. This provisional pricing relates to the quality and quantity of the commodity sold, which is included in sales revenue, and an embedded derivative relating to the pricing of the commodity sold. On adoption of AASB 15, provisional pricing adjustments relating to the embedded derivative are separately identified as movements in the financial instrument rather than being included within Sales revenue. The final pricing adjustment mechanism, being an embedded derivative, is separated from the host contract and recognised at fair value through profit or loss. These amounts are disclosed separately as Provisional pricing adjustments in Other revenue, rather than being included within Sales revenue for the Group. Under AASB 9, the receivable asset is measure at fair value through profit or loss which will result in a similar overall impact on the income statement and balance sheet. AASB 9 introduces an expected credit loss model for impairment of financial assets which replaces the incurred loss model. This does not have a significant impact on the Group given the Group's credit risk management processes, and the resulting insignificant level of credit losses. (b) New standards and interpretations not yet adopted Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2019 reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations is set out below. Independence Group NL 62 IGO ANNUAL REPORT 2019 — 121