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Wool Stocktake : Annual Report 2006-07
31 Australian Wool Innovation Limited 2006/07 note 1. summary of signiﬁcant accounting policies The principal accounting policies adopted in the preparation of the ﬁnancial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. This general purpose ﬁnancial report has been prepared in accordance with Australian equivalents to International Financial Reporting Standards ( AIFRSs), other authoritative pronouncements of Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporation Act 2001. The preparation of ﬁnancial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signiﬁcant to the ﬁnancial statements, are disclosed in Note 1. This ﬁnancial report has been prepared under the historical cost convention, except for certain assets which, as stated, are at valuation. Unless otherwise stated, the accounting policies adopted are consistent with those of the previous year. Comparative information is reclassiﬁed where appropriate to enhance comparability. criticAl Accounting estimAtes And Judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. There are no critical estimates or judgements. Ag e n e r A l A(1) Principles of consolidation The consolidated ﬁnancial statements incorporate the assets and liabilities of all entities controlled by Australian Wo ol Innovation Limited as at 30 June 2007 and the results of all controlled entities for the year then ended. Australian Wo ol Innovation Limited and its controlled entities together are referred to in this ﬁnancial report as the consolidated entity. The effects of all transactions between entities in the consolidated entity are eliminated in full. Outside equity interests in the results and equity of controlled entities are shown separately in the consolidated statement of ﬁnancial performance and statement of ﬁnancial position respectively. Where control of an entity is obtained during a ﬁnancial year, its results are included in the consolidated statement of ﬁnancial performance from the date on which control commences. Where control of an entity ceases during a ﬁnancial year its results are included for that part of the year during which control existed. A(2) Income tax Australian Wo ol Innovation Limited is exempt from income tax in Australia under Section 50-40 of the Income Ta x Assessment Act 1997. A(3) Foreign currency translation Transactions (i) Functional and presentation currency Items included in the ﬁnancial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated ﬁnancial statements are presented in Australian dollars, which is Australian Wo ol Innovation Limited’s functional and presentation currency. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash ﬂow hedges and qualifying net investment hedges. Tr a n sla t i o n differences on non-monetary ﬁnancial assets and liabilities are reported as part of the fair value gain or loss. Tr a n sla t i o n differences on non monetary ﬁnancial assets and liabilities such as equities held at fair value through proﬁt or loss are recognised in proﬁt or loss as part of the fair value gain or loss. Translation differences on non monetary ﬁnancial assets such as equities classiﬁed as available for sale ﬁnancial assets are included in the fair value reserve in equity.
AWI Annual Report 2007-08