SYDNEY PORTS CORPORATION ANNUAL REPORT 12

(u) Contributed equity
Ordinary shares are classified as equity.
The State Owned Corporations Act 1989 requires the
Corporation to have two voting shareholding Ministers.
Each shareholder must, at all times, have an equal number
of shares in the Corporation. At 30 June 2012, the shares
were held by the Treasurer (The Hon. M. Baird, MP) and
the Minister for Finance and Services, Minister for the
Illawarra (The Hon. G. Pearce, MLC).
(v) Revenue recognition
Revenue is recognised and measured at the fair value of
the consideration or contribution received or receivable to
the extent it is probable that the economic benefits will flow
to the Corporation and the revenue can be reliably measured.
The following specific recognition criteria must also be met
before revenue is recognised:
(i) Port revenue
Port revenue from pilotage and navigation services,
wharfage, site occupation charges, mooring fees and other
services are recognised on delivery of the service to the
customer.
(ii) Rental revenue
Rental revenue is accounted for on a straight-line basis
over the lease term.
(iii) Interest revenue
Interest revenue is recognised on an accrual basis using
the effective interest method.
(iv) Retirement benefits income
Retirement benefits income relates to the net of current
service costs, interest costs and expected return on Fund
assets for the defined benefits superannuation schemes.
Schemes in net expense position are recognised in
employee benefit expense.
(v) Sale of assets
Revenue from the sale of assets is recognised as revenue
when the Corporation transfers the significant risks and
rewards of ownership of the assets.
(vi) Assets received free of charge
Assets received at no cost are recognised as revenue at
the fair value of the asset on the date of receipt.
(w) Income tax equivalent and other taxes
Income tax equivalent is required to be paid to the NSW
Government in accordance with Section 20T of the State
Owned Corporations Act 1989. The payments are equivalent
to the amounts that would be payable under the normal
income tax law of the Commonwealth. The National Tax
Equivalent Regime was established on 1 July 2001, with the
Australian Taxation Office administering the tax equivalent
scheme across Australia.
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on
the relevant period’s taxable income. The tax rates and the
tax laws used to compute the amount are those that are
enacted or substantively enacted by the statement of
financial position date.
Deferred income tax is provided on all temporary
differences at the statement of financial position date
between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable
temporary differences:
■■ Except where the deferred income tax liability arises
from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at
the time of the transaction, affects neither the
accounting nor taxable profit or loss; and
■■ In respect of taxable temporary differences associated
with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of
the reversal of the temporary differences can be
controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all
deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is
probable that taxable profit will be available against which
the deductible temporary differences, and the carry-forward
of unused tax assets and unused tax losses can be utilised:
■■ Except where the deferred income tax asset relating to
the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the
transaction, affects neither the accounting nor taxable
profit or loss; and
■■ In respect of deductible temporary differences
associated with investments in subsidiaries, associates
and interests in joint ventures, deferred tax assets are
only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable
future and taxable profit will be available against which
the temporary differences can be utilised.
The carrying amount of deferred income tax assets is
reviewed at each statement of financial position date and
reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part
of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at
the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively
enacted at the statement of financial position date. Income
tax equivalents relating to items recognised directly in
equity are recognised in equity and not in the profit or loss.
Deferred tax assets and deferred tax liabilities are offset
only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax
assets and liabilities relate to the same taxable entity.
Sydney PortS CorPoration finanCial rePort 2011/12 55