Page 127 - Pakistan Oilfields Limited - Annual Report 2021

NOTES TO AND FORMING

PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2021

3.2 Further, the following new standards and interpretations have been issued by the International
Accounting Standards Board (IASB), which are yet to be notified by the Securities and Exchange
Commission of Pakistan (SECP), for the purpose of their applicability in Pakistan:

IFRS 1 First-time Adoption of International Financial Reporting Standards
IFRS 17 Insurance contracts

3.3 The following interpretation issued by the IASB has been waived off by SECP:

IFRIC 12 Service concession arrangements

3.4 As per Securities and Exchange Commission of Pakistan (SECP) SRO 985 (1)/ 2019, dated September
2, 2019, for companies holding financial assets due from Government of Pakistan, the requirements
contained in IFRS 9 with respect to expected credit losses method shall not be applicable till June
30, 2021, provided that such companies shall follow relevant requirements of IAS 39 – Financial
Instruments: Recognition and Measurement, in respect of above referred financial assets during
the exemption period. The Company has assessed that the above SRO does not have any significant
impact on its financial statements.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of measurement

These financial statements have been prepared under the historical cost convention except as
otherwise disclosed in the respective accounting policy notes.
4.2 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified
as the Board of Directors that makes strategic decisions. The management has determined that
the Company has a single reportable segment as the Board of Directors views the Company's
operations as one reportable segment.
4.3 Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic
environment in which the Company operates. The financial statements are presented in Pakistan
Rupees, which is the Company's functional currency.

4.4 Foreign currency transactions and translation

Transactions in foreign currencies are recorded at the rates of exchange ruling on the date of
transaction. All assets and liabilities in foreign currencies are translated into rupees at the rates of
exchange ruling on the date of the statement of financial position. Exchange differences are dealt
with through the statement of profit or loss.

ANNUAL REPORT 2021 125