Annual Report - Campus Living Villages

Campus Living Villages Annual Report 09/10 1 7
Campus Living Villages Fund
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
A$’000
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, laundry, conferences, casual
accommodation and other incidental fees.
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 Fund 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.
g) 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.
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.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to
offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts
recognised directly in equity are also recognised directly
in equity.
Tax consolidation legislation
Under current tax legislation, the stapled trusts are not liable
for Australian income tax, provided that the taxable income
is fully distributed to unit holders each year, and any taxable
capital gain derived from the sale of an asset acquired after 19
September 1985 is fully distributed to unit holders.
CLAT and CLOT are the head entities of their respective tax
consolidated groups. The head entity and the member entities
in the relevant tax consolidated groups account for their own
current and deferred tax amounts. These tax amounts are
measured as if each entity in the tax consolidated groups
continues to be a stand alone taxpayer in its own right,
adjusted for the relevant tax consolidation entries.
In addition to its own current and deferred tax amounts, the
head entity also recognises the current tax liabilities or assets
and the deferred tax assets arising from unused tax losses
and unused tax credits assumed from controlled entities in the
relevant tax consolidated group.
Assets or liabilities arising under tax funding agreements with
the group members are recognised as amounts receivable
from or payable to other entities in the separate financial
statements of each group member. Upon receipt of a funding
advice any group member will pay the head entity the amount
allocated to the group member within the time frame specified
in the funding advice. In the event that the head entity owes
the group member, the same terms will apply.
The tax funding arrangement allows this payment to be settled
by way of intercompany account.
FUND