Annual Report 10/11 - Campus Living Villages

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011 A$’000 Campus Living Villages Annual Report 10/11 Campus Living Villages Fund When revalued assets are sold, amounts included in other reserves in respect of those assets are transferred to retained earnings. r) Intangibles Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Fund’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill is not amortised and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. Cash-generating units represent the Fund’s investment in each country of operation by each primary reporting segment. Management contracts Management contracts acquired as part of a business combination are recognised separately from goodwill. The management contracts are carried at their fair value at the date of acquisition less accumulated amortisation and impairment losses. Amortisation of management contracts is calculated based on the timing of projected cash flows of the contracts over their estimated useful lives, which currently vary from 20 to 30 years. s) Trade and other payables These amounts represent liabilities for goods and services provided to the Fund prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Deferred revenue represents income received in advance from students at the beginning of the semester and is released to revenue when the recognition criteria have been met. t) 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 Statement of Comprehensive Income 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 non-cash assets transferred or liabilities assumed, is recognised in other income or other expenses. Borrowings are classified as current liabilities unless the Fund has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. All borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed. u) Provisions Provisions for legal claims and employee benefits are recognised when the Fund 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. 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. 25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011 A$’000 Campus Living Villages Annual Report 10/11 Campus Living Villages Fund v) Employee benefits Wages and salaries, annual leave Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Long service leave The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Bonus plan The Fund recognises a liability and an expense for bonuses based on a formula that takes into consideration the performance of the Fund after certain adjustments. The Fund recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation. w) Issued capital The issued capital of the parent entity is the unit holdings of CLLT (USA). The issued capital of the Fund is the capital of the acquirers identified in the business combinations in the underlying trusts. x) 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 date. y) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority, in which case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. z) Rounding of amounts The Fund 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. aa) Parent entity financial information The financial information for the parent entity disclosed in note 30 has been prepared on the same basis as the consolidated financial statements except as set below. Investment in subsidiaries Investments in subsidiaries are accounted for at cost in the individual financial statements of the parent entity. 26
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DIRECTORS DECLARATION FOR THE YEAR
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Annual Report 10/11 - Campus Living Villages

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