NOTE

CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

3.1

New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those applied in the preparation of the Group’s annual consolidated financial statements for the year ended

December 31, 2018,

except for the adoption of IFRS

Leases

, as outlined below, and a change in accounting policy for expenditure related to software as a service ("SaaS") cloud computing arrangement. Prior to

2019,

the Group capitalized expenditure related to implementation of SaaS arrangement, while under the amended policy, such expenditure is expensed when incurred. The change in accounting policy for SaaS arrangement had an immaterial impact on the Group’s consolidated financial statements. Several other amendments and interpretations apply for the

first

time in

2019

but did

not

have a material impact on the consolidated financial statements of the Group. The Group has

not

early adopted standards, interpretations or amendments that have been issued but is

not

yet effective. See Note

for information about the Group’s accounting policies.

IFRS

Leases

The Group adopted IFRS

Leases

retrospectively as of

January 1, 2019

with the cumulative effect of initially applying the standard recognized as an adjustment to the opening balance of Retained earnings at that date. Comparative information has

not

been restated.

For leases which had previously been classified as operating leases under the principles of IAS

17,

the lease liability upon adoption of IFRS

was measured as the present value of the remaining lease payments, discounted using the lessee’s estimated incremental borrowing rate as of

January 1, 2019.

The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The Group used a single discount rate to a portfolio of leases with reasonably similar characteristics. The incremental borrowing rate was estimated based on yields for government bonds denominated in the same currency as the lease payments and a credit risk premium. The discount rates were in the range

2.15%

12.3%,

where the variance is primarily explained by the currencies in which the lease payments are denominated in. The right-of-use asset was recognized at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the Statement of Financial Position immediately before the date of initial application.

For leases that were classified as finance leases applying IAS

17,

the carrying amounts of the right-of-use asset and the lease liability at

January 1, 2019

were the carrying amounts of the lease asset and lease liability immediately before that date measured applying IAS

17.

[US$ thousands]	As of January 1, 2019
Measurement of lease liabilities
Operating lease commitments disclosed as of December 31, 2018		7,790
Discounted using the lessee’s incremental borrowing rate (4%) of at the date of initial application		7,202
Add: adjustments as a result of a different treatment of extension and termination options		7,533
Add: finance lease liabilities recognized as of December 31, 2018		234
Lease liability recognized as of January 1, 2019		14,969

The Group elected to apply the recognition exemptions for short-term leases (i.e., those leases that have a lease term of

months or less from the commencement date and do

not

contain a purchase option), and leases for which the underlying asset is of low value. These exemptions are applied to short-term office leases, and leases of office equipment, including printers and photocopying machines. Non-lease components, such as maintenance and supply of utilities, are accounted for separately from lease components.

The Statement of Financial Position increase (decrease) as of

January 1, 2019:

[US$ thousands]	As of January 1, 2019
Assets
Furniture, fixtures and equipment		14,969

Liabilities
Non-current lease liabilities and other loans		10,709
Current lease liabilities and other loans		4,260
Other current liabilities		(64	)
Net impact on equity		64

The net impact on the Group’s equity as of

January 1, 2019

was due to the derecognition of an accrued liability related to a period of free rent of an office space, which was accounted for as a lease incentive under IAS

and SIC

15.

F-

Table of Contents

3.2

New standards, interpretations and amendments

not

yet effective

New and amended IFRSs, interpretations and amendments, which have been published but are

not

effective as of

December 31, 2019,

are

not

expected to have a material impact on the consolidated financial statements upon adoption. As of

January 1, 2020,

the amendments disclosed below became effective. These could impact the Group’s consolidated financial statements for future periods.

Amendments to IFRS

Definition of a Business

The IASB has issued amendments to the definition of a business in IFRS

Business Combinations

to help entities determine whether an acquired set of activities and assets is a business or

not.

The amendments clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. Since the amendments apply prospectively to transactions or other events that occur on or after the date of

first

application, the Group will

not

be affected by these amendments on the date of transition. The Group adopted the amendments on

January 1, 2020.

Amendments to IAS

and IAS

Definition of Material

IAS

Presentation of Financial Statements

and IAS

Accounting Policies, Changes in Accounting Estimates and Errors

have been amended by the IASB to align the definition of “material” across the standards and to clarify certain aspects of the definition. The new definition states that, “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments to the definition of material is

not

expected to have a significant impact on the Group’s consolidated financial statements. The Group adopted the amendments prospectively on

January 1, 2020.