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KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2014
15
2.
ADOPTION OF NEW AND REVISED STANDARDS (CONTINUED)
Standards not yet adopted (continued)
The adoption of IFRS 9 Financial Instruments which the Group plans to adopt for the year beginning on 1 January
2016 will impact both the measurement and disclosures of financial instruments. The Group has not yet assessed the
potential impact of IFRS 15 on its financial results.
The Directors do not expect that the adoption of the other Standards listed above will have a material impact on the
financial statements of the Group in future periods.
Changes in accounting policy
Other than the changes to the standards noted above, the Group’s accounting policies are consistent with the prior
period/years, except for accounting policy for ‘Oil & Gas exploration and evaluation expenditure’.
During the period, the Group has voluntarily changed its accounting policy for Oil & Gas exploration and evaluation
expenditure from the ‘modified full cost method’ to the ‘successful efforts method’ (see note 3) to better reflect the
performance of the Group and to align with the more prevalent method of accounting for Oil and Gas assets within its
peer group.
The change in accounting policy has been applied retrospectively back to the date of incorporation of KEC, 1 August
2005, and the comparative information has been restated where needed. The table below shows the effect of this
change in accounting policy on consolidated income statement, consolidated balance sheet, reported profit for the
year/period, equity, basic and diluted earnings per share. There was no impact on the consolidated statement of cash
flows. In the opening balance sheet of the year 2011, the impact of the change in accounting policy to the successful
efforts method for period from 1 August 2005 to 31 December 2010 has been adjusted within retained earnings
(equity).
Impact on consolidated income statement:
6 months
ended
30.06.13
Unaudited
Year
ended
31.12.13
Audited
Year
ended
31.12.12
Audited
Year
ended
31.12.11
Audited
USD 000’s USD 000’s USD 000’s USD 000’s
Continuing Operations
Decrease in cost of sales
1,307
2,693
3,228
1,775
Increase in exploration expenditure written off
(14,719)
(25,433)
(10,625)
(18,053)
Decrease in profit before tax
(13,412)
(22,740)
(7,397)
(16,278)
Decrease in taxation charge
-
-
-
-
Net impact on profit for the period/year from
continuing operations
(13,412)
(22,740)
(7,397)
(16,278)
Impact on earnings/(loss) per share from
continuing operations
-
Decrease in basic (cents)
(4.1)
(7.0)
(2.3)
(5.2)
-
Decrease in diluted (cents)
(4.1)
(7.0)
(2.3)
(5.2)
Impact on earnings/(loss) per share from
continuing and discontinued operations
-
Decrease in basic (cents)
(4.1)
(7.0)
(2.3)
(5.2)
-
Decrease in diluted (cents)
(4.1)
(7.0)
(2.3)
(5.2)
Impact on consolidated balance
sheet:
30.06.13 31.12.13 31.12.12 31.12.11
01.01.11
USD 000’s USD 000’s USD 000’s USD 000’s USD 000’s
Decrease in intangible exploration
and evaluation assets
(43,363)
(54,077)
(28,644)
(18,019)
(15,326)
Decrease in property, plant and
equipment
(9,050)
(7,664)
(10,357)
(13,585)
-
Net decrease in assets
(52,413)
(61,741)
(39,001)
(31,604)
(15,326)
Net impact on equity
(52,413)
(61,741)
(39,001)
(31,604)
(15,326)