Financial Report Template Page 31
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80NOTES TO THE FINANCIAL STATEMENTS
(CONT)
FOR THE YEAR ENDED 30 JUNE 2015
(o) Employee Benefits
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
Provision is made for the Group’s liability for employee benefits
The amortisation rates used for each class of intangible other
arising from services rendered by employees to the end of the
than goodwill, on a straight line basis, are as follows:
reporting period. Employee benefits that are expected to be
Transformation Project Costs
3 years
settled within one year have been measured at the amounts
expected to be paid when the liability is settled.
Erin Brockovich Agreement
10 years
The Group has performed some analysis on the recent change
Software Development
3 years
to the standard concerning fair value calculations and concluded
Trademarks and patents
10 years
that there has been no material impact on the Group’s financial
statements as a result.
(n) Foreign Currency Transactions and Balances
Functional and presentation currency
Employee benefits payable later than one year have been
measured at the present value of the estimated future cash
The functional currency of each of the Group’s entities is
outflows to be made for those benefits. In determining the
measured using the currency of the primary economic
liability, consideration is given to employee wage increases and
environment in which that entity operates. The consolidated
the probability that the employee may satisfy any vesting
financial statements are presented in Australian dollars which
requirements. Those cash flows are discounted using market
is the parent entity’s functional currency.
yields on the applicable corporate bond rate with terms to
Transaction and balances
maturity that match the expected timing of cash flows
Foreign currency transactions are translated into functional
attributable to employee benefits.
currency using the exchange rates prevailing at the date of the
(p) Provisions
transaction. Foreign currency monetary items are translated at
Provisions are recognised when the group has a legal or
the year-end exchange rate. Non-monetary items measured at
constructive obligation, as a result of past events, for which it is
historical cost continue to be carried at the exchange rate at the
probable that an outflow of economic benefits will result and
date of the transaction. Non-monetary items measured at fair
that outflow can be reliably measured.
value are reported at the exchange rate at the date when fair
values were determined.
Provisions are measured using the best estimate of the amounts
required to settle the obligation at the end of the reporting period.
Exchange differences arising on the translation of monetary items
are recognised in profit or loss, except where deferred in equity as
(q) Cash and Cash Equivalents
a qualifying cash flow or net investment hedge.
Cash and cash equivalents include cash on hand, deposits available
Exchange differences arising on the translation of non-monetary
on demand with banks, other short-term highly liquid investments
items are recognised directly in other comprehensive income to
with original maturities of three months or less, and bank overdrafts.
the extent that the underlying gain or loss is recognised in other
Bank overdrafts are reported within short-term borrowings in
comprehensive income, otherwise the exchange difference is
current liabilities in the Statement of Financial Position.
recognised in the profit or loss.
(r) Trade and Other Receivables
Group companies
Trade and other receivables include amounts due from customers
The financial results and position of foreign operations whose
for goods sold and services performed in the ordinary course of
functional currency is different from the group’s presentation
business. Receivables expected to be collected within 12 months
currency are translated as follows:
of the end of the reporting period are classified as current assets.
All other receivables are classified as non-current assets.
• assets and liabilities are translated at exchange rates prevailing
at the end of the reporting period;
Trade and other receivables are initially recognised at fair value and
• income and expenses are translated at average exchange
subsequently measured at amortised cost using the effective
rates for the period; and
interest method, less any provision for impairment. Refer to
Note 2(j) for further discussion on the determination of
• retained earnings are translated at the exchange rates
impairment losses.
prevailing at the date of the transaction.
(s) Trade and Other Payables
Exchange differences arising on translation of foreign operations
Trade and other payables represent the liabilities for goods and
with functional currencies other than Australian dollars are
services received by the entity that remain unpaid at the end of
recognised in other comprehensive income and included in the
the reporting period. The balance is recognised as a current
foreign currency translation reserve in the Statement of Financial
liability with the amounts normally paid within 30 days of
Position. The cumulative amount of these differences is
recognition of the liability.
reclassified into profit or loss in the period in which the operation
is disposed of.
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