Strategic Report Strategic Report Strategic Report Financial Additional Overview Strategy Performance Governance Statements Information 3. Summary of Significant Accounting Policies continued Adoption of new or revised standards and interpretations The nature and the effect of these changes are disclosed below. IFRS 9 transition The following tables summarise the impact of adopting IFRS 9 on the statement of financial position and retained earnings, including the effect of replacing IAS 39 incurred credit loss calculations with IFRS 9’s ECLs. A reconciliation between the carrying amounts under IAS 39 to the balances reported under IFRS 9 as of 1 January 2018 is as follows: Original carrying Remeasurement* New carrying New Original classification amount under Reclassi- amount under classification under IAS 39 IAS 39 fication ECL Other** IFRS 9 under IFRS 9 Cash and cash equivalents Loans and receivables 1,582,435 – (80) – 1,582,355 Amort ised cost Amounts due from credit Loans and receivables 1,225,947 – (598) – 1,225,349 Amort ised institutions cost Investment securities 1,564,869 – – – 1,564,869 Debt securities Available 1,563,515 – – – 1,563,515 FVOCI for sale – debt Corporate shares Available 1,354 – – – 1,354 FVOCI for sale – equity Loans to customers Loans and receivables 7,625,144 (6,881) (36,919) 31,905 7,613,249 Amortised cost Loans to customers Loans and receivables – 6,881 – – 6,881 FVTPL Accounts receivable and Loans and receivables 38,944 – (6,822) – 32,122 Amortised other loans cost Other assets – derivative FVTPL 12,392 – – – 12,392 FVTPL financial assets Other assets – trading FVTPL 3,191 – – – 3,191 FVTPL securities Income tax assets – 2,293 – – – 2,293 – Finance lease receivables – 65,306 – 92 – 65,398 – All other assets – 1,911,731 – 1 – 1,911,732 – Assets of disposal group – 1,136,417 – (6,535) – 1,129,882 – held for sale Total assets 15,168,669 – (50,861) 31,905 15,149,713 Provisions – (5,915) – (867) – (6,782) – Income tax liabilities – (20,959) – – 2,12 9 (18,830) – All other liabilities – (12,409,425) – – – (12,409,425) – Total liabilities (12,436,299) – (867) 2,129 (12,435,037) Net impact on equity – (51,728) 34,034 due to adopting IFRS 9 at 1 January 2018 * Re-measurement in the above table includes the effect of ECL in the amount of GEL 1,677 recognised on contractually accrued interest income (“ECL gross-up”). **Other re-measurement represents the reinstatement effect of previously written-off gross loans to customers due to the change in write-off policy as a result of IFRS 9 application. Annual Report 2018Bank of Georgia Group PLC 201