2004-05 Annual Report - Australia Post

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
01. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of accounting
The Australian Postal Corporation (the corporation)
is incorporated under the provisions of the Australian
Postal Corporation Act 1989 as amended. Financial
statements are required by clause 1(b) of Schedule
1 to the Commonwealth Authorities and Companies
Act 1997.
This is a general-purpose financial report prepared
in accordance with:
° Finance Minister’s Orders (being the
Commonwealth Authorities and Companies
(Financial Statement) Orders) for reporting periods
ending on or after 30 June 2005
° Australian Accounting Standards and Accounting
Interpretations issued by the Australian Accounting
Standards Board
° Consensus Views of the Urgent Issues Group.
The Corporation and Consolidated Statements of
Financial Performance and Financial Position are
prepared on an accrual basis and are in accordance
with the historical cost convention, except for certain
assets which, as noted, are at valuation. Except
where stated, no allowance is made for the effect of
changing prices on the results or the financial position.
Accounting policies adopted are consistent with those
applied in the prior year.
Assets and liabilities are recognised in the Corporation
and Consolidated Statements of Financial Position
when and only when it is probable that future
economic benefits will flow and the amounts of the
assets or liabilities can be reliably measured. Liabilities
and assets that are unrecognised are reported in
the Schedule of Commitments and the Schedule of
Contingencies (other than unquantifiable or remote
contingencies, which are reported at note 39).
Revenues and expenses are recognised in the
Corporation and Consolidated Statements of
Financial Performance when and only when the flow
or consumption or loss of economic benefits has
occurred and can be reliably measured.
Comparative information is reclassified where
appropriate to achieve consistency in disclosure
with current financial year amounts and other
disclosures. Amounts shown in the financial
statements have been rounded to the nearest
one hundred thousand dollars except in relation
to remuneration of directors, remuneration of
executives and remuneration of auditors.
(b) Principles of consolidation
The consolidated financial statements comprise the
corporation (parent entity) and its controlled entities.
The financial statements of the controlled entities are
prepared using accounting policies consistent with
those of the corporation. The effects of transactions
and balances between the entities are eliminated in
full. Results of controlled entities are consolidated
from the time control is obtained until it ceases.
(c) Revenue recognition
(i) Sales revenue
Sales revenue comprises revenue earned (net of
returns, discounts and allowances) from the major
FOR THE YEAR ENDED 30 JUNE 2005
business activities. Recognition is at point of sale in
the case of postage items and provision of agency
services, point of lodgement in the case of bulk mail
and when control of goods has passed to the buyer in
the case of retail products. Allowance is made for the
assessed amount of revenue from postage sales as at
balance date in respect of which service had not yet
been provided (refer note 17).
(ii) Interest revenue
Interest revenue is recognised when control of
the right to receive the interest payment has been
established.
(iii) Government funding
Funding from Government for specific activities is
recognised when control of the right to receive the
funding has been established.
(iv) Asset sales
Sales of property are generally recognised on
exchange of title. However, in certain circumstances
when there is a contractual obligation to complete a
property sale and settlement is assured, the sale is
recognised when the underlying contract becomes
unconditional. Revenue from the sale of non-property
assets is recognised when control of the asset has
passed to the buyer.
(v) Dividends
Dividends are recognised when control of the right to
receive a dividend has been established. Dividends
received from joint-ventures are accounted for in
accordance with the equity method of accounting.
(d) Depreciation and amortisation
Depreciable property, plant and equipment assets
are written-off to their estimated residual values over
their estimated useful lives to the corporation using
the straight-line method of depreciation.
Depreciation/amortisation rates (useful lives)
and methods are reviewed annually and necessary
adjustments are recognised in the current, or current
and future reporting periods, as appropriate. Residual
values are re-estimated for a change in prices only
when assets are revalued.
Depreciation and amortisation rates applying to items
in each class of depreciable asset are based on the
following useful lives:
2005 2004
Buildings – GPOs 70 years 70 years
Buildings –
other facilities
Leasehold
improvements
40–50 years 40–50 years
Lower of
lease term
and 10 years
Lower of
lease term
and 10 years
Motor vehicles 3–7 years 3–7 years
Specialised plant
and equipment
10–20 years 10–20 years
Other plant and equipment 3–10 years 3–10 years
The aggregate amount of depreciation and
amortisation allocated for each class of asset
during the reporting period is disclosed in note 3.
Australia Post Annual Report 2004/05 Financial and Statutory Reports Notes to and forming part of the financial statements
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