b'86 Mercia Asset Management PLC Annual Report and Accounts 2021Notes to the consolidated financial statements continued1. Accounting policies continuedBasis of consolidation continuedDirect investmentsInvestments that are held as part of the Groups investment portfolio are carried in the balance sheet at fair value even though the Group may have significant influence over those companies. The Group does not consolidate or apply IFRS 3 to subsidiaries held as direct investments as a result of applying the Investment Entity exemption in compliance with IFRS 10. Direct investments held are measured at fair value through profit or loss in accordance with IFRS 9 Financial Instruments, with changes in fair value recognised inthe relevant period. New standards, interpretations and amendments effective in the current financial yearThe following new standards became effective in the current financial year:Amendments to References to the Conceptual Framework in IFRS StandardsAmendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and ErrorsAmendments to IFRS 3 Business CombinationsAmendments to IFRS 16 COVID-19 related Rent ConcessionsAmendments to IFRS 17 Insurance Contracts.The adoption of these standards has had no material impact on the Group.New standards, interpretations and amendments not yet effectiveAt the date of approving these financial statements, the following standards and interpretations, which have not been applied inthese consolidated financial statements, were in issue but not yet effective:Amendments to IAS 1 Presentation of Financial Statementseffective for annual reporting periods beginning on or after 1 January 2022Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Venturesdeferredindefinitely.There are no other IFRSs or International Financial Reporting Interpretations Committee (IFRIC") interpretations that are not yet effective that would be expected to have a material impact on the Group.Revenue recognitionRevenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of VAT. All revenue from services is generated within the United Kingdom. Revenue isrecognised when the Group satisfies its performance obligations, in line with IFRS 15. Revenue from services comprises:Fund management feesFund management fees are generally earned as a fixed percentage of funds under management and are recognised as the related services are provided, as performance obligations are met. Cash receipts in relation to revenues earned are generally received shortly after the start of the relevant invoicing period.Initial management feesInitial management fees are generally earned as a fixed percentage of the amounts invested by the Group in recognition of the work involved in each investment round. These one-off payments made by the investee company are recognised when the performance obligation of providing those services is satisfied at a point in time, being upon completion of the investment. Cash receipts in relation to revenues earned are generally received shortly after completion of the relevant investment.Portfolio directors feesPortfolio directors fees are earned either as a percentage of the amounts invested by the Group, or as a fixed amount. These are usually annual fees, typically charged quarterly in advance to the investee company. They are distinct and separable to annual fund management fees and initial management fees. Amounts invoiced are recorded as deferred income, included in current liabilities and then recognised in the consolidated statement of comprehensive income over the contractual period for which the related services are provided, as performance obligations are met. Cash receipts in relation to revenues earned are generally received shortly after the start of the relevant invoicing period.Share offer feesShare offer fees are typically earned from managed funds on a percentage of funds raised basis. They are recognised in the consolidated statement of comprehensive income upon completion of the fundraising as the performance obligation is met. Cashreceipts are received upon the allotment of shares to investors. Costs associated with the fundraising are recognised in theconsolidated statement of comprehensive income within administrative expenses when incurred.'