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Wool Stocktake : Annual Report 2006-07
NOTES TO THE FINANCIAL REpORT ( CONTINUED) note 1. summary of signiﬁcant accounting policies (continued) (iii) Group companies The results and ﬁnancial position of all the Group entities (none of which has the currency of a hyperinﬂationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: –Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; –Income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); –All resulting exchange differences are recognised as a separate component of equity. A(4) Rounding of amounts The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the ﬁnancial report. Amounts in the ﬁnancial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar. b revenue And expenditure B(1) Revenue recognition Revenue for the sale of goods is recognised upon the delivery of the goods to the customers. Revenue for the disposal of non current assets is recognised when control of the asset has passed to the buyer. Revenue from the rendering of a service is recognised by reference to the stage of completion of contracts or other agreements to provide services. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the ﬁnancial assets. The wool levies and government grants are brought to account when received or receivable from the Federal Government. B(2) Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. B(3) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax ( GST), except: –Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; –For receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. B(4) Acquisition of assets Purchases of property, plant and equipment are recognised initially at cost in the statement of ﬁnancial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition. B(5) Research, Development and Innovation Research expenditure is recognised as expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when it is probable that the project will, after considering its commercial and technical feasibility, be completed and generate future economic beneﬁts and its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct labour and an appropriate proportion of overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs are recoded as intangible assets and amortised from the point at which the asset is ready for use on a straight-line basis over its useful life, which varies from 3 to 5 years. B(6) Leases Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classiﬁed as ﬁnance leases. Leases in which a signiﬁcant potion of the risks and rewards of ownership are not transferred to the Group as lessee are classiﬁed as operation leases (net of any incentives received from the lessor) are charged to the income statement on a straight- line basis over the period of the lease.
AWI Annual Report 2007-08