annual report 2011

IOOF | annual report 2011
items comprise mainly corporate assets, head office expenses,
and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during
the period to acquire property and equipment, and intangible
assets other than goodwill.
(w) Liability to buy back vested shares
A liability has been recognised in respect of an obligation by
the Group to buy back vested shares in some Perennial Group
subsidiaries under certain circumstances. The above liabilities
are recorded at fair value. Determination of fair value has
required assumptions concerning future growth, discount rates
and fund flows.
For further information on valuation methods for the liability to
buy back vested shares refer to note 5(e) fair value estimation.
Change in accounting policy
Under the previous accounting policy, changes in the fair value
of the buy back liability were recognised in profit or loss. The
change in accounting policy is to recognise these movements
in a share buy back revaluation reserve which more accurately
reflects the nature of the underlying instrument. The liability
to buy back vested shares is measured and recognised in
accordance with AASB 139 Financial Instruments: Recognition
and Measurement precluding any adjustment for the
probability that settlement of the liability will occur. The
directors have assessed the probability that the Group will
be required to settle the share buy back liability as low and
therefore recognition of movements in the reserve provides
users with increased relevance and reliability of the financial
performance of the Group.
(x) New standards and interpretations not yet
adopted
A number of new standards, amendments to standards and
interpretations are effective for annual periods beginning
after 1 July 2011, and have not been applied in preparing
these consolidated financial statements. None of these is
expected to have a significant effect on the consolidated
financial statements of the Group, except for AASB 9 Financial
Instruments, which becomes mandatory for the Group’s 2014
consolidated financial statements and could change the
classification and measurement of financial assets. The Group
does not plan to adopt this standard early and the extent of
the impact has not been determined. In addition, there are
new standards due to be effective for periods beginning after
I July 2013, AASB 10 Consolidated Financial Statements, AASB 11
Joint Arrangements, AASB 12 Disclosure of interest in other entities
and AASB 13 Fair value measurement. The extent of the impact
has not yet been determined.
(y) Parent entity financial statements
Parent entity information has been reinstated in accordance
with a directive from the Australian Prudential Regulatory
Authority dated 1 September 2010 to all its regulated entities.
Disclosure of parent entity information is not required under
the Corporations Act 2001.
This change in accounting policy has had an effect on
consolidated earnings per share and on net profit, further
information is provided in note 4 Change in accounting
policy. A third balance sheet has also been presented on the
statement of financial position.
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