Page 53 - RFU Annual Report 2015/2016

Financial Statements
51

(u) Translation of foreign currencies (w) Debentures 3. Judgements in applying
Transactions in foreign currencies are The Group has determined that its accounting policies and key sources
recorded at the rate of exchange at the debentures meet the criteria within of estimation uncertainty
date of the transaction or, if hedged, FRS 102 section 34 to be classified as
at the forward contract rate. Monetary public benefit entity concessionary The preparation of the financial
assets and liabilities denoted in foreign loans. statements requires management
currencies are translated at the rates to make judgements, estimates and
ruling at the Balance Sheet date. The Group initially measures assumptions that affect the amounts
Exchange gains and losses, arising these loans on the Balance Sheet reported for assets and liabilities as
on both settled and unsettled foreign at the amount received or paid. In at the Balance Sheet date, and the
currency transactions, are included in subsequent years, the carrying amount amounts reported for revenues and
the Profit and Loss Account. is adjusted to reflect any accrued expenses during the year. However,
interest payable or receivable. It is the nature of estimation means that
not anticipated that there will be any actual outcomes could differ from those
(v) Derivative financial instruments interest payable or receivable. estimates.
and hedging activities
The use by the Group of derivative Accounting policies relating to the i) Critical judgements
financial instruments is limited to Parent only The following judgements (apart from
forward foreign exchange contracts those involving estimates) have had
used in respect of Six Nations (x) Disclosure exemptions the most significant effect on amounts
tournament income, receivable in recognised in the financial statements.
Euros. Derivative financial instruments The Parent has taken advantage of
are initially measured at fair value the following disclosure exemptions Consolidation
on the date on which a derivative available under FRS 102: The Group has a number of quasi
contract is entered into and are subsidiaries which are charities. As the
subsequently measured at fair value the requirements of section 7 charities do not have share capital, the
through profit or loss, except to the Statement of Cash Flows and section Group has judged that it has control of
extent these contracts are included 3 Financial Statement Presentation these entities through representation
in a hedge accounting arrangement. paragraph 3.17 (d); on their Boards of Trustees, and they
The Group applies cash flow hedge are therefore considered to be quasi
accounting to its foreign currency the requirements of section 11 subsidiaries.
exchange contracts, with the effective paragraphs 11.39 to 11.48A and section
portion of the hedge being recognised 12 paragraphs 12.26 to 12.29;
in other comprehensive income. Any
remaining gain or loss on the hedging the requirement of section 33 Related
instrument is hedge ineffectiveness Party Disclosures paragraph 33.7.
that is recognised in the Profit and Loss
account.

Annual Report 2015/16