Broome Port Authority - Parliament of Western Australia

Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted
by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available which the temporary difference can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefits
will be realised.
c) Receivables
(i) Trade receivables
Trad e debtors are recognised and carried at the original invoice amounts less an allowance for any
uncollectable amounts. Debtors are generally settled within 14 days except for property rentals,
which are governed by individual lease agreements.
The collectability of receivables is reviewed on an ongoing basis and any receivables identified as
uncollectable are written-off against the allowance account. The allowance for uncollectable
amounts (doubtful debts) is raised when there is objective evidence that the Authority will not be
able to collect a debt.
(ii) Lease receivables
A lease receivable is recognised for leases of property, plant and equipment which effectively
transfers to the lessee substantially all of the risks and benefits incidental to legal ownership of the
leased asset. The lease receivable is initially recognised as the amount of the present value of the
minimum lease payments receivable at the reporting date plus the present value of any
unguaranteed residual value expected to accrue at the end of the lease term.
Finance lease payments are allocated between interest revenue and reduction of the lease
receivable over the term of the lease in order to reflect a constant periodic rate of return on the net
investment outstanding in respect of the lease with interest revenue calculated using the interest
rate implicit in the lease recognised directly in the income statement.
d) Inventories
Inventories consist of stores which are measured at the lower of cost and net realisable value.
e) Income tax
The Authority operates within the national tax equivalent regime (“NTER”) whereby an equivalent
amount in respect of income tax is payable to the State Government. The calculation of the liability
in respect of income tax is governed by NTER guidelines and directions approved by Government.
As a consequence of participation in the NTER, the Authority is required to comply with AASB 112
Income Taxes.
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