Page 98 - SFG_ANNUALREPORT_12OCT_SINGLEPAGE
P. 98
NOTES TO THE FINANCIAL STATEMENTS (CONT.)
Commission, relating to ‘rounding-off’. Amounts in this estimates will seldom equal the related actual results.
report have been rounded off in accordance with that The judgements, estimates and assumptions that have
Class Order to the nearest thousand dollars, or in certain a significant risk of causing a material adjustment to
cases, the nearest dollar. the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are
New Accounting Standards and discussed below.
Interpretations not yet mandatory
or early adopted Provision for impairment of inventories
The provision for impairment of inventories assessment
Australian Accounting Standards and Interpretations requires a degree of estimation and judgement. The level
that have recently been issued or amended but are not of the provision is assessed by taking into account the
yet mandatory, have not been early adopted by the historical sales experience, the ageing of inventories and
consolidated entity for the annual reporting period ended other factors that affect inventory obsolescence.
30 June 2015. The consolidated entity’s assessment of the
impact of these new or amended Accounting Standards Fair value measurement hierarchy
and Interpretations, most relevant to the consolidated The consolidated entity is required to classify all assets
entity, are set out below. and liabilities, measured at fair value, using a three
level hierarchy, based on the lowest level of input that
AASB 9 Financial Instruments is significant to the entire fair value measurement,
This standard and its consequential amendments are being: Level 1: Quoted prices (unadjusted) in active
applicable to annual reporting periods beginning on or markets for identical assets or liabilities that the entity
after 1 January 2017 and completes phases I and III of can access at the measurement date; Level 2: Inputs
the IASB’s project to replace IAS 39 (AASB 139) ‘Financial other than quoted prices included within Level 1 that
Instruments: Recognition and Measurement’. This standard are observable for the asset or liability, either directly
introduces new classification and measurement models or indirectly; and Level 3: Unobservable inputs for the
for financial assets, using a single approach to determine asset or liability. Considerable judgement is required to
whether a financial asset is measured at amortised cost or determine what is significant to fair value and therefore
fair value. The accounting for financial liabilities continues which category the asset or liability is placed in can
to be classified and measured in accordance with AASB be subjective.
139, with one exception, being that the portion of a
change of fair value relating to the entity’s own credit risk Impairment of goodwill
is to be presented in other comprehensive income unless it In accordance with the accounting policy stated in note 1,
would create an accounting mismatch. Chapter 6 ‘Hedge the consolidated entity tests annually, or more frequently
Accounting’ supersedes the general hedge accounting if events or changes in circumstances indicate impairment,
requirements in AASB 139 and provides a new simpler whether goodwill has suffered any impairment.
approach to hedge accounting that is intended to more Determining whether goodwill is impaired requires an
closely align with risk management activities undertaken estimation of the value-in-use of the cash-generating
by entities when hedging financial and non-financial risks. units to which goodwill has been allocated. The value-in-
The consolidated entity will adopt this standard and use calculations require the use of assumptions, including
the amendments from 1 July 2017 but the impact of its estimated discount rates based on the current cost of
adoption is yet to be assessed by the consolidated entity. captial and growth rates of the estimated future cash flows.
Note 2. Critical accounting Impairment of other indefinite life intangible
judgements, estimates and assets
assumptions The consolidated entity tests annually, or more frequently
if events or changes in circumstances indicate impairment,
The preparation of the financial statements requires whether other indefinite life intangible assets have
management to make judgements, estimates and suffered any impairment. Determining whether other
assumptions that affect the reported amounts in the indefinite life intangible assets are impaired requires an
financial statements. Management continually evaluates estimation of an asset’s fair value less costs of disposal.
its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and
assumptions on historical experience and on other
various factors, including expectations of future events,
management believes to be reasonable under the
circumstances. The resulting accounting judgements and
097
