Port Hedland Port Authority Annual Report 2011 - Parliament of ...

Notes to the Financial Statements and Forming Part of the Accounts for
the Year Ended 30 June 2011
Note 1. Basis of Preparation
(a)
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian
Accounting Standards Board (AASB) and the financial reporting provisions of the Port Authorities Act 1999,
except as disclosed in note 1(b).
The financial statements were authorised for issue on 12 September 2011 by the Board of Directors of Port
Hedland Port Authority (“the Authority”).
(b)
Presentation of the statement of comprehensive income
According to AASB 101 Presentation of Financial Statements, expenses classified by nature are not
reallocated among various functions within the entity. However, the Authority has allocated employee
benefits expenses to various line items on the statement of comprehensive income including marine
expenses, port operations expenses, general administration, and asset maintenance. This allocation reflects
the internal reporting structure of the Authority which allocates labour expenses to significant expense
items in the statement of comprehensive income based on the nature of the expenses incurred. The
Authority believes that the allocation is more relevant to the understanding of the financial performance of
the Authority and does not result in a function of expense presentation.
The directors have concluded that the financial statements present fairly the Authority’s financial position,
financial performance and cash flows and that it has complied with applicable standards and
interpretations, except that it has departed from AASB 101, para 99, to achieve a fair presentation.
Total employee benefits expenses are disclosed in note 9 to the financial statements.
(c)
Basis of measurement
The financial statements have been prepared on the accrual basis of accounting using the historical cost
convention.
(d)
Functional and presentation currency
These financial statements are presented in Australian dollars and all values are rounded to the nearest
thousand dollars ($’000) unless otherwise stated.
(e)
Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amount of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation, uncertainty and critical judgements in
applying accounting policies that have the most significant effect on the amount recognised in the financial
statements are:
Provision for environmental remediation
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