Endeavour Energy Annual Performance Report - Parliament of New ...

2 Statement of Significant
Accounting Policies
continued
AASB 2010-6 Amendments to
Australian Accounting Standards –
Disclosures on Transfers of Financial
Assets – Effective 1 July 2011
AASB 2010-7 Amendments to
Australian Accounting Standards
arising from AASB 9 (Dec 2010) –
Effective 1 January 2013
AASB 2010-8 Amendments to
Australian Accounting Standards –
Deferred Tax: Recovery of Underlying
Assets – Effective 1 January 2012
These Standards and associated
amendments are not expected
to have a material impact on
the financial statements, except
for changes associated with
AASB 1053 and AASB 2010-2
which are expected to significantly
reduce disclosure requirements
when adopted.
(d) Use of estimates and
judgements
The preparation of financial
statements in conformity with
AASBs requires management
to make judgements, estimates
and assumptions that affect the
application of accounting policies
and the reported amounts of assets,
liabilities, income and expenses.
Actual results may differ from
these estimates.
Estimates and underlying
assumptions are reviewed on
an ongoing basis. Revisions
to accounting estimates are
recognised in the period in which
the estimates are revised and in
any future periods affected.
Information about critical
judgements in applying
accounting policies that have
the most significant effect on
the amounts recognised in
the financial statements, and
information about assumptions
and estimation uncertainties that
have a significant risk of resulting
in a material adjustment within the
next financial year, is included in
the following notes:
Note 2(t) – Unread Meters
Note 12 – Property, Plant and
Equipment – Revaluations
Note 14(h) – Employee Benefits
Superannuation – Valuation Method
and Principal Economic Assumptions
Note 18 – Provisions
Note 21 – Financial Instruments
Note 22(b) – Contingent Liabilities
(e) Contributed equity
The State Owned Corporations
Act 1989 (as amended) requires
Endeavour Energy to have two
voting shareholders. Current
shareholders are the New South
Wales Treasurer and the Minister
for Finance who hold the shares on
behalf of the NSW Government.
Each shareholder holds one $1 share,
with each share being of the same
class with equal rights.
(f) Foreign currency
translation
Both the functional and presentation
currency of Endeavour Energy is
Australian dollars (A$).
Transactions in foreign currencies
are initially recorded in the functional
currency at the exchange rates at
the date of the transaction. At each
balance sheet date, monetary items
denominated in foreign currencies
are retranslated at the rates
prevailing on the balance sheet date.
Any foreign currency income or
expense items are translated at
exchange rates as at the date of
the transaction, with resulting
exchange differences recognised
as income or expense in profit or
loss. Any foreign currency assets or
liabilities are translated at exchange
rates prevailing on the balance
sheet date, with resulting exchange
differences classified as equity and
transferred to the foreign currency
translation reserve.
(g) Cash and cash equivalents
Cash and cash equivalents in the
Statement of Financial Position
comprise cash at bank and in
hand, short-term deposits readily
convertible to cash, investments for
a fixed term where the maturity date
is three months or less from year end
balance date, and readily tradeable
investments which are likely to
be converted to cash within three
months of year end balance date
even though the maturity date may
be greater than three months from
year end balance date.
(h) Trade and other
receivables
Trade and other receivables are
financial assets recognised initially
at fair value plus any directly
attributable transaction costs.
Subsequent to initial recognition
receivables are measured at
amortised cost using the effective
interest rate method, less any
impairment losses.
Collectibility of trade receivables
is reviewed on an ongoing basis.
Individual debts that are known to
be uncollectible are written off when
identified. An impairment provision
is recognised when there is objective
evidence that the entity will not
be able to collect the receivable.
Financial difficulties of the debtor,
default payments or debts more than
120 days overdue are considered
objective evidence of impairment.
The amount of the impairment loss
is the receivable carrying amount
compared to the present value
of estimated future cash flows,
discounted at the original effective
interest rate.
Endeavour Energy Annual Performance Report 2010–11
55