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Wool Stocktake : Annual Report 2006-07
33 Australian Wool Innovation Limited 2006/07 note 1. summary of signiﬁcant accounting policies (continued) c Assets C(1) Cash For the purpose of the statement of cash ﬂows, cash includes deposits held at call with a bank, funds under investment securities. There were no standby credit facilities in place at 30 June 2007. C(2) Receivables Collectibility of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. Aprovisionfor doubtful debts is raised when some doubt as to collection exists. C(3) Recoverable amount of non current assets The recoverable amount of an asset is the net amount expected to be recovered through the cash inﬂows and outﬂows arising from its continued use and subsequent disposal. Where the carrying amount of a non current asset is greater than its recoverable amount, the asset is written down to its recoverable amount. Where net cash inﬂows are derived from a group of assets working together, the recoverable amount is determined on the basis of the relevant group of assets. The decrement in the carrying amount is recognised as an expense in net surplus or deﬁcit in the reporting period in which the recoverable amount write down occurs. C(4) Impairment of assets Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Value in use is assured through reference to the depreciated replacement cost for an equivalent asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identiﬁable cash inﬂows which are largely independent of the cash inﬂows from other assets or groups of assets (cash generating units). Non ﬁnancial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. C(5) Intangible Assets (i) Intellectual property Costs associated with intellectual property, either developed or acquired by the Group, are expensed as incurred, except to the extent that they are expected beyond a reasonable doubt to be recoverable. C(6) Investments and other financial assets Classiﬁcation The Group classiﬁes its investments in the following categories: ﬁnancial assets at fair value through proﬁt or loss, loans and receivables, held-to-maturity investments and available-for-sale ﬁnancial assets. The classiﬁcation depends on the purpose for which the investments were acquired. Management determines the classiﬁcation of its investments at initial recognition and, in the case of assets classiﬁed as held-to-maturity, re-evaluates this designation at each reporting date. (i) Financial assets at fair value through profit or loss Financial assets at fair value through proﬁt or loss are ﬁnancial assets held for trading. A ﬁnancial asset is classiﬁed in this category if acquired principally for the purpose of selling in the short term. Derivatives are classiﬁed as held for trading unless they are designated as hedges. Assets in this category are classiﬁed as current assets. (ii) Loans and receivables Loans and receivables are non-derivative ﬁnancial assets with ﬁxed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classiﬁed as non- current assets. Loans and receivables are included in trade and other receivables in the balance sheet (notes 7 and 8). (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative ﬁnancial assets with ﬁxed or determinable payments and ﬁxed maturities that the Group’s management has the positive intention and ability to hold to maturity. If the Group were to sell other than an insigniﬁcant amount of held- to-maturity ﬁnancial assets, the whole category would be tainted and reclassiﬁed as available-for-sale. Held-to- maturity ﬁnancial assets are included in non-ﬁnancial assets, except for those with maturities less than 12 months from the reporting date, which are classiﬁed as current assets. (iv) Available-for-sale financial assets Available-for-sale ﬁnancial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classiﬁed in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.
AWI Annual Report 2007-08