Cairn Energy

Cairn Energy plc Monitor

Cairn Energy plc Annual Report 2017
CR Monitor Issue: 
Company covered: 
Cairn Energy plc
Period End: 
31 December, 2017
Report issued on 10 September 2018 covered the following practice issues:
Discussion of key audit matters included in audit report.
Extended disclosure in respect of the impacts of new accounting standards including IFRS 9 "Financial instruments", IFRS 15 "Revenues from contracts with customers" and IFRS 16 "Leases".
Change in income statement linked to commencement of production.
Breakdown of production assets presented in a note to the accounts.
Presentation of impairment sensitivity analysis.
Presentation of a reconciliation of movements in liabilities arising from financing activities.

Disclosure of the impacts of IFRS 16 "Leases"

IFRS 16 “Leases” will fundamentally change accounting by lessees as it requires assets previously off balance sheet under operating lease arrangements to be brought on balance sheet as is currently the case for finance leased assets. As a result on application companies will recognise both additional assets and additional liabilities. Consequently there will also be knock on effects in the income statement as operating lease charges are replaced by a depreciation charge and a finance expense. This report analyses the financial statements of a range of companies to firstly establish whether there has been any early adoption and secondly to establish what companies are disclosing in respect of IFRS 16 and its future impacts.