01 02 03 Financial Statements 04 3. Summary of significant accounting policies continued New and Amended Standards and Interpretations continued IFRS 9 Financial Instruments continued Adoption effect In total, due to the unsecured nature of the Group’s receivables, the loss allowance increased by GEL 7,027 at the transition date, which was 1 January 2018. The effect of adopting IFRS 9 is, as follows: Original carrying New carrying amount under amount under IAS 39 as at Remeasurement IFRS 9 as at 1 January 2018 amount 1 January 2018 Assets Receivables from healthcare services 118,281 – 118,281 Less – Allowance for impairment (17,337) (5,535) (22,872) Receivables from healthcare services, net 100,944 (5,535) 95,409 Receivables from sales of pharmaceuticals 19,798 – 19,798 Less – Allowance for impairment – (1,492) (1,492) Receivables from sale of pharmaceuticals, net 19,798 (1,492) 18,306 Equity Retained earnings 504,192 (6,535) 497,657 Non-controlling interests 64,716 (492) 64,224 Write-off policy The Group writes-off financial assets when it becomes aware that there is no reasonable expectation of recovery based on the pre-determined indicators. These indicators are the bankruptcy of the counterparty, court decision or more than two years of overdue period. Any receivable that has not been ruled by the court to be uncollectible, are continued to be enforced by the Company regardless the number of overdue days. In accordance with Georgian legislation, due to statute of limitation, GHG is unable to enforce collection of receivables if 3 years from the date of last written reminder to the counterparty have passed. Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts The amendments address concerns arising from implementing the new financial instruments standard, IFRS 9, before implementing IFRS 17 Insurance Contracts, which replaces IFRS 4. The amendments introduce two options for entities issuing insurance contracts: a temporary exemption from applying IFRS 9 and an overlay approach. The Group opted a temporary exemption from applying IFRS 9. IFRIC Interpretation 22 Foreign Currency Transactions and Advance Considerations The interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of advance consideration. This interpretation does not have any impact on the Group’s consolidated Financial Statements. Amendments to IAS 40 Transfers of Investment Property The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use. These amendments do not have any impact on the Group’s consolidated Financial Statements. Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions The IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash-settled to equity-settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are met. The Group’s accounting policy for cash-settled share-based payments is consistent with the approach clarified in the amendments. In addition, the Group has no share-based payment transaction with net settlement features for withholding tax obligations and had not made any modifications to the terms and conditions of its share-based payment transaction. Therefore, these amendments do not have any impact on the Group’s consolidated Financial Statements. Amendments to IAS 28 Investments in Associates and Joint Ventures – Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice The amendments clarify that an entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, then it may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or jotenture’s iterests in subsidiaries. This election is made separatelyor each iestment entity associate or jotenture, at the later of the date on which: (a) the investment entity, associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. These amendments do not have any impact on the Group’s consolidated Financial Statements. 139