24.02.2010 annual report 2009.pdf - Woodside

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Notes to and forming part
of the financial report
For the year ended 31 December 2009
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 the requirements
of the Corporations Act, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board.
The Financial Report has been prepared on a historical cost basis, except for derivative financial instruments and certain
other financial assets, which have been measured at fair value.
The Financial Report is presented in Australian dollars. The amounts contained in this report have been rounded to the
nearest million dollars under the option available to the Group under Australian Securities and Investments Commission
Class Order 98/0100 dated 10 July 1998, unless otherwise stated.
The Financial Report was authorised for issue in accordance with a resolution of the directors on 24 February 2010.
The nature of the operations and principal activities of the Group are described in the Directors' Report.
Apart from changes in accounting policies noted below, the accounting policies adopted are consistent with those
disclosed in the Annual Financial Report for the year ended 31 December 2008. Certain comparative information has been
reclassified to be presented on a consistent basis with the current year's presentation.
Changes in accounting policy and disclosure
The adoption of new and amending Australian Accounting Standards and Interpretations mandatory for annual periods
beginning on or after 1 January 2009 did not result in any significant changes to the accounting policies. The impact of
new and amending Standards and Interpretations on the financial statements is as follows:
• AASB 101 Presentation of Financial Statements (revised). The revised Standard separates owner and non-owner
changes in equity and requires a statement of comprehensive income to be prepared which discloses all changes
in equity during a period resulting from non-owner transactions. The Group has elected to present comprehensive
income using the two statement approach;
• AASB 8 Operating Segments. The Standard replaces AASB 114 Segment Reporting and requires a management
approach to be used for segment reporting and also replaces the requirement to determine primary (business)
and secondary (geographical) reporting segments of the Group. This approach identifies operating segments by
reference to internal reports that are evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. The Group concluded that the operating segments determined in
accordance with AASB 8 are the same as the business segments reported under AASB 114; and
• AASB 7 Financial Instruments: Disclosure. The amended Standard requires disclosures about fair value
measurement and liquidity risk. Fair value measurements related to all financial instruments recognised and
measured at fair value are to be disclosed by source of inputs using a three level fair value hierarchy by class. The
amendments also clarify the requirements for liquidity risk disclosures with respect to derivative transactions and
assets used for liquidity management. The fair value measurement disclosures are presented in Note 25(h). The
liquidity risk disclosures are not significantly impacted by the amendments and are presented in Note 25(c).
(b) Statement of compliance
The Financial Report complies with Australian Accounting Standards and International Financial Reporting Standards, as
issued by the International Accounting Standards Board.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 December each year.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated
from the date at which control is transferred out of the Group.
At acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values in accordance
with the purchase method of accounting. Any excess of the cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. All intercompany balances and transactions, including unrealised profits and losses arising
from intra-group transactions, have been eliminated in full.
A change in ownership of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.