Brambles 2006 Annual Report - Alle jaarverslagen

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Brambles
2006 Annual Report
Comparative amounts for the prior year are restated in the income
statement to include current year discontinued operations.
SEGMENT REPORTING
Brambles’ primary segment for reporting purposes is by business
segment as Brambles’ risks and rates of return are affected
predominantly by the difference in the products and services
provided by its business streams. Secondary segment information
is reported geographically.
Primary segment information is further analysed between
continuing and discontinued operations.
PRESENTATION CURRENCY
The consolidated financial statements are presented in US dollars.
Brambles has selected the US dollar as its presentation currency
for the following reasons:
• a significant portion of Brambles’ activity is denominated in
US dollars; and
• it is widely understood by Australian, UK and international
investors and analysts.
The parent entity financial statements of BIL and BIP continue
to be presented in their functional currencies of Australian dollars
and sterling respectively.
FOREIGN CURRENCY
Items included in the financial statements of each of Brambles’
entities are measured using the functional currency of each entity.
Foreign currency transactions are translated into the functional
currency of each entity using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions, and from the
translation at year end rates of monetary assets and liabilities
denominated in foreign currencies, are recognised in the income
statement, except where deferred in equity as qualifying cash
flow hedges or qualifying net investment hedges.
Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined.
Gains and losses arising on retranslation are recognised directly
in equity.
The results and cash flows of subsidiaries, joint ventures and
associates are translated into US dollars using the average
exchange rates for the period. Where this average is not a
reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, the exchange rate on the
transaction date is used. Assets and liabilities of subsidiaries,
joint ventures and associates are translated into US dollars at
the exchange rate ruling at the balance sheet date. All resulting
exchange differences arising on the translation of Brambles’
overseas entities are recognised as a separate component
of equity.
The financial statements of foreign subsidiaries, joint ventures
and associates that report in the currency of a hyperinflationary
economy are restated in terms of the measuring unit current at
the balance sheet date before they are translated into US dollars.
Goodwill and fair value adjustments arising on the acquisition of
a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate.
In its transition to IFRS, Brambles has chosen not to make use of
the exemption set out in IFRS 1/AASB 1 that permits cumulative
translation differences that existed at the date of transition to IFRS
to be transferred to retained earnings and the foreign currency
translation reserve at 1 July 2004 deemed to be zero. Instead,
the foreign currency translation reserve has been recalculated in
US dollars from the date of establishment of the DLC. Any gain
or loss on the subsequent disposal of a foreign operation will
include the deferred cumulative exchange differences recognised
in equity in respect of that entity from the date of establishment
of the DLC.
The principal exchange rates affecting Brambles were:
US$:A$ US$:euro US$:£
Average 2006 0.7474 1.2256 1.7899
2005 0.7532 1.2686 1.8557
Year end 30 June 2006 0.7425 1.2813 1.8525
30 June 2005 0.7615 1.2116 1.7960
REVENUE
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to Brambles and the revenue can
be reliably measured. Revenue is measured at the fair value of
the consideration received or receivable. Amounts disclosed as
revenue are net of duties and taxes paid (Value Added Tax, Goods
and Services Tax and local equivalents), except for UK landfill tax.
Revenue is recognised as follows:
• For services, when invoicing the customer following the
provision of the service and/or under the terms of agreed
contracts in accordance with agreed contractual terms in
the period in which the service is provided;
• Where services are provided under long term contracts,
the percentage of completion method is used to determine
applicable revenue. Where the outcome of a contract cannot
be reliably estimated but the applicable costs are expected
to be recovered, revenue is recognised only to the extent of
costs incurred.
OTHER INCOME
Other income includes net gains on disposal of property, plant
and equipment in the ordinary course of business, which are
recognised when control of the property has passed to the buyer.
Amounts arising from compensation for irrecoverable pooling
equipment are recognised only when it is probable that they will
be received.
Dividends
Dividend revenue is recognised when the shareholders’ right
to receive the payment is established.
FINANCE REVENUE
Interest revenue is recognised as the interest accrues (using
the effective interest method, which is the rate that exactly
discounts estimated future cash receipts through the expected
life of the financial instrument) to the net carrying amount of the
financial asset.
BORROWING COSTS
Borrowing costs are recognised as expenses in the year in which
they are incurred, except where they are included in the cost of
qualifying assets.
The capitalisation rate used to determine the amount of borrowing
costs to be capitalised is the weighted average interest rate
applicable to the entity’s outstanding borrowings during the
year. No borrowing costs were capitalised in 2006 or 2005.