AWB Limited - 2004 Annual Report

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2004
INDEX
Page
1 Summary of significant accounting policies 63
2 Revenue from ordinary activities 67
3 Profit from ordinary activities before income tax expense 68
4 Taxation 69
5 Cash assets 70
6 Receivables 70
7 Inventories 70
8 Other assets 70
9 Investments accounted for using the equity method 71
10 Interests in joint venture operations 72
11 Other financial assets 72
12 Intangible assets 72
13 Property, plant and equipment 73
14 Payables 74
15 Interest bearing liabilities 74
16 Provisions 75
17 Other liabilities 76
18 Contributed equity 76
19 Reserves and retained profits 77
20 Outside equity interests 77
21 Total equity reconciliation 77
22 Dividends 78
23 Notes to statement of cash flows 78
24 Directors and executive disclosures 79
25 Auditor’s remuneration 84
26 Related party disclosures 85
27 Segment information 86
28 Expenditure commitments 88
29 Contingent liabilities 89
30 Employee entitlements and superannuation commitments 89
31 Financial instruments 90
32 Deed of Cross Guarantee 97
33 Controlled entities 98
34 Earnings per share 100
35 Subsequent events 101
36 Disclosing the impact of adopting AASB equivalents 101
to International Financial Reporting Standards (A-IFRS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(a) Basis of preparation
The financial report is a general purpose financial report which has been
prepared in accordance with Accounting Standards, Urgent Issues Group
Consensus Views, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001.
It has been prepared on the basis of historical costs and except where
stated, does not take into account fair values of non–current assets.
(b) Changes in accounting policies
Accounting policies have been consistently applied by each entity in the
consolidated entity and are consistent with those of the previous year.
Comparative information has been repositioned or reclassified where
appropriate to ensure comparability with the current reporting period.
(c) Principles of consolidation
Controlled entities
The financial statements of controlled entities are included from the
date control commences until the date control ceases.
Outside interests in the equity and results of the entities that are
controlled by the company are shown as a separate item in the
consolidated financial statements.
Associates
Associates are those entities, other than partnerships, over which the
consolidated entity exercises significant influence and which are not
intended for sale in the near future.
In the consolidated financial statements, investments in associates are
accounted for using equity accounting principles. Investments in
associates are carried at the lower of the equity accounted amount and
recoverable amount. The consolidated entity’s equity accounted share of
the associates’ net profit or loss is recognised in the consolidated
statement of financial performance from the date significant influence
commences until the date significant influence ceases. Other movements
in reserves are recognised directly in consolidated reserves.
Joint venture operations
Joint venture operations are jointly controlled by the consolidated entity.
The consolidated entity’s interests in unincorporated joint ventures are
brought to account by including its proportionate share of the joint
ventures’ assets, liabilities and expenses and the consolidated entity’s
revenue from the sale of its share of output on a line by line basis, from
the date joint control commences to the date joint control ceases.
Transactions eliminated on consolidation
Unrealised gains and losses and inter–entity balances resulting from
transactions with or between controlled entities are eliminated in full on
consolidation.
Unrealised gains resulting from transactions with associates and joint
ventures, including those relating to contributions of non–monetary
assets on establishment, are eliminated to the extent of the consolidated
entity’s interest. Unrealised gains relating to associates and joint ventures
are eliminated against the carrying amount of the investment. Unrealised
losses are eliminated in the same way as unrealised gains, unless they
evidence a recoverable amount impairment.
AWB National Pools
As in previous years, the activities of the AWB National Pools have not
been recognised in the financial statements of the consolidated entity.
The economic benefit from the activities of the AWB National Pools are
derived by pool participants rather than the consolidated entity.
(d) Revenue recognition
Revenues are recognised at fair value of the consideration received net of
the amount of goods and services tax payable to the Australian Taxation
Office.
Sales
Revenue from sales made on commercial terms is recognised when title
for the commodity transfers to the customer. In the case of export sales,
the bill of lading (shipment) date is taken as the transaction date unless
title is to pass at a materially different time.
Management fee revenue
Management fee revenue is recognised according to when the costs of
providing the services are incurred.
Interest revenue
Interest revenue is recognised as it accrues taking into account the
effective yield of the financial asset.
63