NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the period ended 28 July 2018 I.OTHER ACCOUNTING POLICIES (CONTINUED) (c) New accounting standards and interpretations (continued) AASB 15 Revenue from Contracts with Customers AASB 15 Revenue from Contracts with Customers introduces a new five step model to determine when to recognise revenue, and at what amount. The model is based on the concept of recognising revenue for performance obligations only when they are satisfied and control of the goods or services is transferred, for an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Transition AASB 15 is effective for periods beginning on or after 1 January 2018 and therefore will be adopted by the Group for the period ending 27 July 2019. Recognition and measurement The majority of the Group’s revenue is forgoods sold in store or online where there is a single performance obligation and revenue recognition remains at the point of sale or when delivery is provided to the end customer. This is consistent with the Group’s current revenue recognition policy. The Group has performed a detailed assessment on the impact of AASB 15 by assessing all revenue streams across the Group and determined that there is no material impact resulting from AASB 15, except for non-redemption income on gift cards and non-redemption income on rewards cards issued under the Group loyalty program, Myer One. The Group is required to recognise the expected non-redemption amount as revenue in proportion to the pattern in which the gift or reward card is utilised by the customer. This change will be applied retrospectively with the cumulative effect of initially applying this change expected to result in an increase to the opening balance of retained earnings of approximately $4m for the period ending 27 July 2019. AASB 16 Leases AASB 16 Leases will replace existing accounting requirements under AASB 117 Leases and related interpretations. AASB 16 eliminates the classification between operating and finance leases and introduces a single lessee accounting model. Under AASB 16, the Group’s accounting for operating leases as a lessee will result in the recognition of a right-of-use (ROU) asset and a corresponding lease liability, with the exception of short-term leases under 12 months and where the underlying ROU is of a low value. The lease liability represents the present value of future lease payments. There will be a separate recognition of the depreciation charge on the ROU asset and interest expense on the lease liability. This will result in the recognition of a front-loaded pattern of expense for most leases, even when constant annual rentals are paid. Transition AASB 16 is effective for periods beginning on or after 1 January 2019 and therefore will be effective in the Group’s annual reporting period ending 25 July 2020. The Group will be applying the modified retrospective approach and an adjustment to the opening balance of retained earnings for the period ending 25 July 2020. Recognition and measurement As a lessee with a substantial portfolio of operating leases, the implementation of this standard is expected to have a material impact on the Group’s consolidated financial statements at transition and in future years to the extent that leases currently classified as operating leases will need to be recognised on balance sheet. In addition, the current operating lease expense recognised in the income statement will be replaced with a depreciation and interest expense. The Group has performed a preliminary assessment on the impact of AASB 16, however a reliable estimate of the quantitative impact cannot yet be provided due to unresolved matters, including: ·Determination of the lease term for certain leases with extensive option periods; and ·Conclusion on appropriate discount rates The Group will provide an estimate of the financial impact of the new standard once these matters are resolved and the financial impact can be assessed. Myer Annual Report 2018 85