EN - Business (Report) - Flipbook - Page 23
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
• The contractual terms of the financial assets give rise
to cash flows that are solely payments of principal and
interest on the principal amount outstanding
After initial recognition, these are measured at
amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting
is immaterial. RASWA's cash and cash equivalents, trade
and most other receivables fall into this category of
financial instruments.
Impairment of financial assets
AASB 9's impairment requirements use more forward
looking information to recognise expected credit losses
- the 'expected credit losses (ECL) model'. RASWA
considers a broader range of information when assessing
credit risk and measuring expected credit losses,
including past events, current conditions, reasonable
and supportable forecasts that affect the expected
collectability of the future cash flows of
the instrument.
Classification and measurement of financial liabilities
Financial liabilities are initially measured at fair value,
and, where applicable, adjusted for transaction costs
unless RASWA designated a financial liability at fair value
through profit and loss. Subsequently, financial liabilities
are measured at amortised cost using the effective
interest method.
The effective interest method is a method of calculating
the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash payments through the expected life of the
financial liability, or (where appropriate) a shorter period,
to the net carrying amount on initial recognition.
All interest-related charges and, if applicable, changes
in an instrument's fair value that are reported in profit or
loss are included within finance costs or sundry revenue.
The useful lives of all non-current assets are reviewed
at least annually. Where a revision is made to the useful
lives of non-current assets, the effect of that revision is
included in the Statement of Comprehensive Income
and separately disclosed.
Where the carrying value of non current assets decreases
to $5,000 or less, RASWA has a policy of writing these
off via accelerated depreciation. This is primarily as the
cost of maintaining the asset register and the ongoing
processing of these assets in our view outweighs any
benefits of disclosing these “immaterial items”.
(f) Impairment of long-lived assets
At each reporting date, RASWA reviews the carrying
amounts of its assets to determine whether there is any
indication that the assets have suffered an impairment
loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine
the extent of the impairment, if any. Where the asset
does not generate cash flows that are independent from
other assets, RASWA estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs
to sell and the value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a discount rate that reflects current
market assessments of the time value of money and the
risks specific to the asset.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount. An impairment loss
is recognised in the profit and loss immediately.
(g) Borrowing costs
All borrowing costs are expensed when incurred as
RASWA does not have any qualifying assets that require
borrowing costs to be capitalised.
(e) Property, plant and equipment
All non-current assets are initially recorded at cost,
being the purchase consideration paid at the date of
acquisition plus costs incidental to the acquisition.
(h) Employee entitlements provision
A liability is recognised for benefits accruing to employees
in respect of wages and salaries, annual leave and long
service leave when it is probable that settlement will be
required and they are capable of being measured reliably.
All non-current assets except land are depreciated
over their expected economic lives using the straight line
method. The following rates are used in the calculation
of depreciation:
Liabilities recognised in respect to employee
entitlements expected to be settled within 12 months are
measured at their nominal values using the remuneration
rates expected to apply at the time of settlement.
•
•
•
Liabilities recognised in respect to employee entitlements
not expected to be settled within 12 months are measured
at the present value of estimated future cash outflows to
be made by RASWA in respect of services provided by
employees up to reporting date.
Buildings
2.5%
Improvements to Showground 3% - 5%
Plant and equipment
5% - 40%
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