RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS
1.6 Financial Instruments (continued)
Cashflow hedge accounting (continued)
in other comprehensive income is included in the income
statement in the period when the hedged item affects the
income statement. The ineffective portion of any gain or loss
is recognised immediately in the income statement.
Where the hedging instrument or hedge relationship is
terminated but the hedged transaction is still expected to
occur, the cumulative unrealised gain or loss at that point
remains in equity and is recognised in accordance with the
above policy when the transaction occurs. If the hedged
transaction is no longer expected to occur, the cumulative
unrealised gain or loss is recognised in the income statement
Financial assets and financial liabilities are offset and the
net amount reported in the statement of financial position
when the RCS Group has a legally enforceable right to set
off the recognised amounts, and intends either to settle on
a net basis, or to realise the asset and settle the liability
1.7 Property and Equipment
Recognition and measurement
Items of property and equipment are measured at cost less
accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset. Purchased software that is integral
to the functionality of the related equipment is capitalised as
part of that equipment.
When parts of an item of property and equipment have
different useful lives, they are accounted for as separate items
(major components) of property and equipment.
Gains and losses on disposal of an item of property and
equipment are determined by comparing the proceeds from
disposal with the carrying amount of property and equipment
and are recognised net within “operating costs” in the income
The cost of replacing part of an item of property and
equipment is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied
within the part will flow to the RCS Group and its cost can
be measured reliably. The carrying amount of the replaced
part is derecognised. The costs of the day-to-day servicing
of property and equipment are recognised in the income
statement as incurred.
Depreciation is recognised in the income statement on a
straight-line basis over the estimated useful lives of each part
of an item of property and equipment.
The estimated depreciation rates for the current and
comparative periods are as follows:
– Computer hardware 33%
– Furniture and fittings 16% - 20%
– Leasehold property 10%
– Motor vehicles
Depreciation methods, useful lives and residual values are
reviewed at each reporting date.
Depreciation of an item of property and equipment
commences when the item is available for use.
1.8 Reinsurance Contract issued in Cell Captive
In-substance reinsurance contracts issued are those contracts
that transfer significant insurance risk from the insurer to the
respective company in a cell captive arrangement.
for the period ended 31 December 2015