Financial Report Template Page 32
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80NOTES TO THE FINANCIAL STATEMENTS
(CONT)
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
(iv) Goodwill impairment and the determination of Cash
Generating Units (“CGU’s”)
(t) Borrowing Costs
The key assumptions used to determine the recoverable amount
Borrowing costs directly attributable to the acquisition,
for the different CGU’s, including a sensitivity analysis are
construction or production of assets that necessarily take a
disclosed and further explained in note 19.
substantial period of time to prepare for their intended use or
sale, are added to the cost of those assets, until such time as the
(v) Tax loss recognition
assets are substantially ready for their intended use or sale.
The group will only account for tax losses when they are utilised
All other borrowing costs are recognised in profit or loss in the
as explained in note 24.
period in which they are incurred.
(vi) Fair value of financial statements
(u) Goods and Services Tax (GST)
When the fair values of financial assets and financial liabilities
Revenues, expenses, assets and liabilities are recognised net of
recorded in the statement of financial position cannot be
the amount of GST, except where the amount of GST incurred is
measured based on quoted prices in active markets, their fair value
not recoverable from the Australian Taxation Office (ATO).
is measured using valuation techniques including the discounted
cash flow (DCF) model. The inputs to these models are taken from
Receivables and payables are stated inclusive of the amount of
observable markets where possible, but where this is not feasible,
GST receivable or payable. The net amount of GST recoverable
a degree of judgement is required in establishing fair values.
from, or payable to, the ATO is included with other receivables
Judgements include consideration of inputs such as liquidity risk,
or payables in the Statement of Financial Position.
credit risk and volatility. Changes in assumptions in relation to these
Cash flows are presented on a gross basis. The GST components
factors could affect the reported fair value of financial instruments.
of cash flows arising from investing or financing activities which
Contingent consideration, resulting from business combinations,
are recoverable from, or payable to, the ATO are presented as
is valued at fair value at the acquisition date as part of the
operating cash flows included in receipts from customers or
business combination. When the contingent consideration
payments to suppliers.
meets the defintion of a financial liability, it is subsequently
(v) Comparative Figures
re-measured to fair value at each reporting date. The
When required by Accounting Standards, comparative figures
determination of fair value is based on discounted cash flows.
The key assumptions take into consideration the probability of
have been adjusted to conform to changes in presentation for
meeting each performance target and the discount factor.
the current financial year.
(vii) Control over Bradley Bayly Holdings Pty Ltd
Where the Group retrospectively applies an accounting policy,
makes a retrospective restatement or reclassifies items in its
Effective from 1 June 2015, the Group acquired 25% of the voting
financial statements, an additional Statement of Financial
shares of the existing law practices of Bradley Bayly Holdings Pty
Position as at the beginning of the preceding period in addition
Ltd. However, due to the nature of the contractual arrangement
to the minimum comparative financial statement is presented.
with the vendors, including the voting rights obtained and
existence of a call option exercisable within two months for the
(w) Critical Accounting Estimates and Judgments
remaining 75% interest, the Directors determined that Bradley
The Directors evaluate estimates and judgments incorporated into
Bayly was a 100% controlled entity effective 1 June 2015, because
the financial statements based on historical knowledge and best
the call option gave the group present access to the returns over
available current information. Estimates assume a reasonable
all of the shares held by the 75% NCI shareholders. There is
expectation of future events and are based on current trends and
therfore no NCI at 30 June 2015. The call option was exercised on
economic data, obtained both externally and within the Group.
31 July 2015 with the remaining consideration paid on that date.
Key Estimates and Judgements
Consequently, the results and balance sheet of the acquired entity
have been included in full in these consolidated financial
(i)
Provision for Work in Progress
statements with a liability recognised for the consideration payable
The company has provided for potential non-recovery of work
on the remaining interest.
in progress by evaluating the prospects of each case and its
likelihood of recovery. This is done by reviewing the historical
(viii) Purchase of files
recovery rates of cases in each jurisdiction and each worktype.
The cash outflows to purchase a group of case files from a third
(ii) Classification of Work in Progress and Disbursements
party legal practice are classified within investing activities in the
statement of cash flows, given the assets acquired, being work in
The company determines the classification between current and
progress, are intiially recognised on the balance sheet in a similar
non current by evaluating the expected timing of settlements
manner to when acquired as part of a business combination.
and billings of each case, taking into account historical trends
and expected velocity of cases.
(iii) Provision for Doubtful Debts
The company has fully provided for all debtors where there is
an inherent uncertainty in relation to the collection of the debt.
SHINE CORPORATE LTD | FINANCIAL REPORT | 2015
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