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

Note 2. Summary of Significant Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in these
financial statements unless otherwise stated.
Certain comparative amounts have been reclassified to conform with the current year’s presentation
(see note 1(b)).
(a)
Revenue recognition
Revenue from ordinary activities is net of returns and taxes, for services to entities outside the
Authority and is recognised as revenue when the services have been provided. Lease revenue,
derived from the lease of vacant land and buildings is recognised in income a straight line basis
over the lease term. Other Revenue and Interest Revenue which includes interest on short term
investments, is recognised when earned.
(b)
Income tax
The Authority operates within the national tax equivalent regime (“NTER”) whereby an equivalent
amount in respect of income tax is payable to the State Government. The calculation of the
liability in respect of income tax is governed by NTER guidelines and directions approved by
Government.
As a consequence of participation in the NTER, the Authority is required to comply with AASB 112
Income Taxes.
Income tax expense comprises current and deferred tax. Income tax expense is recognised in
profit or loss except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit. Deferred tax is not recognised on the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting, nor taxable
profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will
be available against which the temporary difference can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
(c)
Receivables
Trade debtors are recognised and carried at the original invoice amounts less an allowance for
any uncollectible amounts. Debtors are generally settled within 30 days except for property
rentals, which are governed by individual lease agreements.
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