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CSIR ANNUAL REPORT 2010/11
Notes to the Annual Financial Statements
for the year ended 31 March 2011
1PRINCIPAL ACCOUNTING POLICIES (continued)
Income tax (continued)
except to the extent that it relates to a
transaction that is recognised directly
in equity. The effect on deferred tax of
any changes in tax rates is recognised
in the statement of comprehensive
income except to the extent that it
relates to items previously charged or
credited directly to equity.
Provisions
Provisions are recognised when
the Group has a present legal or
constructive obligation as a result of
past events, for which it is probable
that an outfl ow of economic
benefi ts will be required to settle the
obligation, and a reliable estimate
can be made of the amount of the
obligation. Provisions are determined
by discounting the expected future
cash fl ows at a pre-tax rate that refl ects
current market assessments of the time
value of money and the risks specifi c to
the liability.
A provision for onerous contracts
is recognised when the expected
benefi ts to be derived by the Group
from a contract are lower than the
unavoidable cost of meeting its
obligations under the contract. The
provision is measured at the present
value of the lower of the expected
cost of terminating the contract and
the expected net cost of continuing
with the contract. Before a provision
is established, the Group recognises
any impairment loss on the assets
associated with that contract.
Government grants
Government grants that compensate
the Group for expenses incurred are
recognised as income on a systematic
basis over periods necessary to
match the assistance with the related
expenses it is intended to compensate.
Grants that compensate the Group for
the cost of an asset are deducted in
arriving at the carrying amount of the
acquired asset.
Revenue recognition
Revenue from the sale of goods is
measured at the fair value of the
consideration received or receivable,
net of returns and allowances, trade
discounts and volume rebates. Revenue
is recognised when the signifi cant
risks and rewards of ownership have
been transferred to the buyer, recovery
of the consideration is probable, the
associated costs and possible return of
goods can be estimated reliably and
there is no continuing management
involvement with the goods, and the
amount of revenue can be measured
reliably.
Revenue from services rendered
is recognised in profi t or loss in
proportion to the stage of completion
of the transaction at the reporting date.
The stage of completion is assessed by
reference to work performed as at the
reporting date.
Contract revenue includes the initial
amount agreed in the contract plus
any variations in contract work, claims
and incentive payments to the extent
that it is probable that these will result
in revenue and can be measured
reliably. As soon as the outcome of
a contract can be estimated reliably,
contract revenue and expenses
are recognised in profi t or loss in
proportion to the stage of completion
of the contract.
The stage of completion is assessed
by reference to work performed
as at reporting date. When the
outcome of a contract cannot be
estimated reliably, contract revenue
is recognised only to the extent of
contract costs incurred that are likely to
be recoverable. An expected loss on
a contract is recognised immediately
in profi t or loss.
The annual Parliamentary Grant is
adjusted for the grant received for
projects started before year-end, but
not completed as detailed above
(refer to Government grants).
Royalties are accrued based on
the stipulations of the applicable
contracts.
Finance income/expense
Finance income/expense comprises
interest receivable on funds invested,
dividend income, fair value
adjustments on investments and
interest payable on borrowings.
Interest income is recognised in the
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