Lead Manager

APPENDIX A PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
Employee benefit expenses and revenues arising in respect of the following categories: wages and salaries,
non-monetary benefits, annual leave, long service leave, sick leave and other leave benefits; and other types
of employee benefits are recognised against profits on a net basis in their respective categories.
A liability for employee benefits in the form of bonus plans is recognised in accrued liabilities when it is probable
that the liability will be settled and there are formal terms in place to determine the amount of the benefit, or the
amount of the benefit has been determined before the time of completion of the annual report. Liabilities for
bonus plans are expected to be settled within 12 months and are measured at the amounts expected to be paid
when they are settled.
(y) Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the
revenue can be reliably measured.The following specific recognition criteria must also be met before revenue is
recognised.Where amounts do not meet these recognition criteria, they are deferred and recognised in the period
to which they relate.
Fees from financing transactions and management fees
Fees from financing transactions are recognised as revenue when the group has provided all services necessary for
a final closing of the transaction, the transaction has actually closed, the fee is due and payable, and the likelihood
that any contingencies that could result in a reduction of the fee is remote.
Fees from financing transactions include fees earned on asset sales that are payable to the group on certain
financings at the end of the financing term. On certain transactions, the fee earned on asset sales is equal to a
share of the asset value above a specified minimum and such fees are recognised when the group controls the
right to receive the fee.
Periodic management fees are received for management services provided for income producing assets owned by
third parties.These fees are recognised as revenues as the management services are provided, and the group
controls the right to be compensated for the services provided.
Rental income
Rental income from aircraft, railcars and real estate leases, other than contingent rents, is recognised on a
straight-line basis over the respective lease terms. Contingent rents are recognised as revenue when they are due
and payable.
Sale of assets
Revenue from sales of assets is recognised at the time the title is transferred or delivery has occurred, the price is
fixed and determinable, and collectibility is probable.
Interest
Interest income from loans and advances and other interest bearing assets is brought to account on an accrual
basis. Accrued coupons, amortisation of premiums and accretion of discounts are brought to account as interest
income on a yield to maturity basis in accordance with the terms of the security.
Dividends
Dividend revenue is recognised when Babcock & Brown controls the right to receive the dividend payment.
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