Annual Report - Campus Living Villages

9 4 Campus Living Villages Annual Report 09/10
Campus Living Finance Trust
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
A$’000
CLFT
Fair value
If the market for a financial asset is not active, the entity
establishes fair value by using valuation techniques. These
include the use of recent arm’s length transactions, reference
to other instruments that are substantially the same,
discounted cash flow analysis, and option pricing models
making maximum use of market inputs and relying as little as
possible on entity-specific inputs.
Impairment
The entity assesses at each balance date whether there is
objective evidence that a financial asset or entity of financial
assets is impaired. Impairment losses are recognised in the
income statement.
h) Fair value estimation
The fair value of financial assets and financial liabilities
must be estimated for recognition and measurement or for
disclosure purposes.
Borrowings are classified as current liabilities unless the
entity has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Borrowing costs are expensed.
k) Issued capital
The issued capital of the entity is the unit holdings of CLFT.
l) Distributions
A provision is made for the amount of any distribution
approved by the directors, on or before the end of the financial
year but not distributed at balance sheet date.
m) Provisions
Provisions are recognised when the entity has a present legal
or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
The fair value of financial instruments that are not traded in
an active market is determined using valuation techniques.
The entity uses a variety of methods and makes assumptions
that are based on market conditions existing at each balance
date. Other techniques, such as estimated discounted cash
flows, are used to determine fair value for the remaining
financial instruments.
The carrying value less impairment provision of trade
receivables and payables are assumed to approximate their
fair values due to their short-term nature. The fair value of
financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current
market interest rate that is available to the entity for similar
financial instruments.
i) Trade and other payables
These amounts represent liabilities for goods and services
provided to the entity prior to the end of financial period which
are unpaid. The amounts are unsecured and are usually paid
within 30 days of recognition.
j) Borrowings and borrowing costs
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in the income statement over the
period of the borrowings using the effective interest method.
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a
financial liability that has been extinguished or transferred
to another party and the consideration paid, including
any noncash assets transferred or liabilities assumed, is
recognised in other income or other expenses.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect
to any one item included in the same class of obligations may
be small.
Provisions are measured at the present value of
management’s best estimate of the expenditure required to
settle the present obligation at the balance sheet date. The
discount rate used to determine the present value reflects
current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision
due to the passage of time is recognised as interest expense.
n) Rounding of amounts
The entity is of a kind referred to in Class Order 98/100, issued
by the Australian Securities and Investments Commission,
relating to the ‘’rounding off’’ of amounts in the financial
report. Amounts in the financial report have been rounded off
in accordance with that Class Order to the nearest thousand
dollars, or in certain cases, the nearest dollar.
o) New accounting standards
AASB 9 Financial Instruments and AASB 2009-11
Amendments to Australian Accounting Standards arising
from AASB 9 (effective from 1 January 2013) AASB 9 Financial
Instruments addresses the classification and measurement of
financial assets and is likely to affect the group’s accounting
for its financial assets. The standard is not applicable until 1
January 2013 but is available for early adoption.
Revised AASB 124 Related Party Disclosures and AASB
2009-12 Amendments to Australian Accounting Standards
(effective from 1 January 2011). In December 2009 the AASB
issued a revised AASB 124 Related Party Disclosures.