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

09
Financial
statements
Notes to the Financial Statements
For the year ended 30 June 2011
2 Statement of Significant
Accounting Policies
continued
An impairment loss is recognised for
any initial or subsequent write-down
of the asset (or disposal group) to
fair value less costs to sell. A gain
is recognised for any subsequent
increase in fair value less costs to
sell of an asset (or disposal group),
but not in excess of any cumulative
impairment losses previously
recognised. A gain or loss not
previously recognised by the date
of the sale of the non-current asset
(or disposal group) is recognised at
the date of recognition.
The sale of the Retail business has
been assessed as a discontinued
operation in accordance with AASB 5
Non Current Assets Held for Sale
and Discontinued Operations. The
results of discontinued operations
are presented separately on the face
of the Statement of Comprehensive
Income and the asset and liabilities
are presented separately in the notes
to the accounts (refer Note 5).
(m) Intangible assets
Intangible assets acquired separately
are capitalised at cost. Subsequent
to initial recognition the intangible
asset is measured at cost less
accumulated amortisation and
accumulated impairment losses.
Development activities relating
to new or substantially improved
internally generated software is
capitalised where development
costs can be measured reliably,
the process is technically and
commercially feasible and future
economic benefits are probable.
Other development expenditure and
expenditure on research activities
is recognised in profit or loss as
incurred. Capitalised development
expenditure is measured at cost
less accumulated amortisation and
accumulated impairment losses.
The useful lives of intangible assets
are assessed to be either finite or
indefinite. Amortisation is charged
on assets with finite lives, with the
expense accounted for in the profit
or loss. Useful lives are examined on
an annual basis and adjustments,
where necessary, are made on a
prospective basis.
Intangible assets with finite lives
are tested for impairment where an
indicator of impairment exists, while
intangible assets with indefinite lives
are tested annually for impairment,
either individually or at the cash
generating unit level.
Easements are an interest in land
allowing access to network assets.
As no time period is attached to
the easements, they are considered
to have an indefinite life and are
not amortised.
Gains or losses arising from
derecognition of an intangible asset
are measured as the difference
between the net disposal proceeds
and the carrying amount of the asset
and are accounted for in the profit or
loss when the asset is derecognised.
(n) Trade payables
Trade and other payables are
financial liabilities recognised
initially at fair value plus any directly
attributable transaction costs.
Subsequent to initial recognition
trade and other payables are
measured at amortised cost using
the effective interest rate method.
This measurement is equivalent to
the original invoice amount.
(o) Provisions
A provision is recognised if,
as a result of a past event, the
Corporation has a present legal
or constructive obligation that
can be estimated reliably, and
it is probable that an outflow of
economic benefits will be required
to settle the obligation.
(i)
Employee Benefits
General
Provision is made for employee
benefits accruing to employees
up to reporting date in respect of
annual leave, maturing allowance,
pre 93 sick leave and long service
leave, when it is probable that
settlement will be required and
they are capable of being measured
reliably. Long service leave, pre 93
sick leave and maturing allowance
provisions have been based on an
actuarial assessment undertaken by
Cumpston Sarjeant Pty Limited as
at March 2011 and the associated
formulae provided for intervening
periods between assessments.
Cumpston Sarjeant Pty Limited
has based their assessment on the
following assumptions:
(a) 10 year Commonwealth
Government bond rate used
as the gross discount rate; and
(b) Rate of general salary increase
in line with prior year.
Liability for employee benefits
(long service leave, pre 93 sick leave
and maturing allowance) which are
not expected to be settled within
twelve months are discounted at
5.5% per annum, based on 10 year
Government bond rates as at
30 June 2011.
A summary of the policies applied to the Corporation’s intangible assets is as follows:
Software
Easements
Useful lives Finite Indefinite
Amortisation method used 4 to 9 years – straight line Not depreciated or revalued
Internally generated/acquired Internally generated/acquired Acquired
Impairment test Where an indicator of impairment exists Annually and where an indicator of impairment exists
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