Annual Report - Campus Living Villages

1 1 6 Campus Living Villages Annual Report 09/10
Campus Living Overseas Trust
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
A$’000
CLOT
Consolidated entity companies
The results and financial position of all of the subsidiaries
of the consolidated entity that have a functional currency
different from the presentation currency are translated into
the presentation currency as follows:
> > Assets and liabilities for each balance sheet presented
are translated at the closing rate at the date of that
balance sheet;
> > Income and expenses for each income statement are
translated at average exchange rates (unless this is not a
reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the
transactions); and
> > All resulting exchange differences are recognised as a
separate component of equity.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entities and translated at the closing rate.
d) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are net
of discounts and refunds.
Management and development fees
Income is recognised when services have been provided to
a customer in accordance with terms prescribed in formal
Operating Agreements and Development Contracts.
Interest
Interest income is recognised on a time proportion basis
using the effective interest method. When a receivable is
impaired, the consolidated entity reduces the carrying amount
to its recoverable amount, being the estimated future cash
flow discounted at the original effective interest rate of the
instrument, and continues unwinding the discount as interest
income. Interest income on impaired loans is recognised using
the original effective interest rate.
Dividends and distributions
Dividends and distributions are recognised as revenue when
the right to receive payment is established.
e) Income tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on the
national income tax rate (or State tax rates for US operations)
for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences
and to unused revenue tax losses.
The consolidated entity recognises revenue when the amount
of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria
have been met for each of the consolidated entity’s activities
as described below. The amount of revenue is not considered
to be reliably measurable until all contingencies relating to
the sale have been resolved. The consolidated entity bases its
estimates on historical results, taking into consideration the
type of customer, the type of transaction and the specifics of
each arrangement.
Revenue is recognised for the major business activities
as follows:
Accommodation rental revenue
Accommodation rental revenue is recognised on a time
proportion basis in income on a straight line basis over the
lease term. Revenue received in advance is carried as a liability
on the balance sheet.
Other accommodation related revenue
Other accommodation related revenue is recognised when
the service has been provided or goods have been sold
to the customer. Other accommodation related revenue
typically includes income from catering, conferences, casual
accommodation and other incidental fees.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. However, the deferred
income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those
temporary differences and losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent
entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences
will not reverse in the foreseeable future.