Broome Port Authority - Parliament of Western Australia

1. Basis of preparation
a) Statement of compliance
The financial report is a general-purpose financial report which has been prepared in accordance
with Australian equivalents to International Financial Reporting Standards (AIFRSs), other
authoritative pronouncements of the Australian Accounting Standards Board and Urgent Issues
Group Consensus Views and the Port Authorities Act 1999. The accounting policies adopted in the
preparation of the financial statements have been consistently applied throughout all periods
presented, unless otherwise stated.
The financial statements were authorised for issue on 15 August, 2011 by the Board of Directors of
Broome Port Authority (“the Authority”).
b) Presentation of the statement of comprehensiv e income
During the ye ar ended 30 June 2011 the Authority modified the statement of comprehensive income
presentation of expenses using a classification based on the nature of expenses. Comparative
amounts
were reclassified for consistency.
Classification of expenses by nature is considered to provide more relevant and reliable information
than classifica tion by function due to the nature of the Authority’s operations.
A ccording to AASB 101 Presentation of Financial Statements, expen ses classified by nature are not
reallocated among various functions within the entity. However, t he Authority has allocated
employee benefits expenses to various line items on the statement of comprehensive income
including marine exp enses, port operations expenses, general administration, and asset
maintenance. This allocation reflects the internal reporting structure of the Authority which allocates
labour expenses to significant expense items in the income statement based on the nature of the
expenses incurred. The Authority believes that the allocation is more
relevant to the understanding
of the financial performance of the Authority and does not result in a function of expense
presentation.
The directors have concluded that the financial statements present fairly the Authority’s financial
position, financial performance and cash flows and that it has complied with applicable standards
and interpretations, except that it has departed from AASB 101, p ara 99, to achieve a fair
presentation.
c) Basis of measurement
The financial statements have been prepared on the accrual basis of accounting using the historical
cost convention.
d) Functional and presentation currency
These financial statements are presented in Australian dollars and all values are rounded to the
nearest thousand dollars ($’000) unless otherwise stated.
e) Use of estimates and judgements
The preparation of financial statements requires management to make judgments, 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.
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