2023 annual report final WEB - Flipbook - Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the lease term if the lease is reasonably certain to be
extended (or not terminated). Potential future cash
outflows have not been included in the lease liabilities
because it is not reasonably certain that leases will be
extended (or not terminated). The assessment is
reviewed if a significant event or a significant change
in circumstances occurs which effects this assessment
and that is within the control of the lessee.
Note 3. Significant accounting judgments, estimates
and assumptions
The preparation of the Group's consolidated financial
statements requires management to make judgements,
estimates and assumptions that affect the reported
amounts in the financial statements. Uncertainty about
these assumptions and estimates could result in
outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future
periods. The National Executive evaluates estimates and
judgements incorporated into the financial report based
on historical knowledge and best available information.
Estimates assume a reasonable expectation of future
events and are based on current trends and economic
data, obtained both externally and within the Group.
(f) Determining whether a grant contains enforceable
and sufficiently specific obligations
The interaction between AASB 15 and AASB 1058
require management to assess whether the
government grants and other funding received need
to be accounted for under AASB 15 or AASB 1058. Key
to this assessment is whether the government grants
and other funding agreements contain:
a contract with a customer that creates
‘enforceable’ rights and obligations, and
the contract includes ‘sufficiently specific’
performance obligations.
(a) Incremental Borrowing Rate
The Group has applied as a key judgement on the
calculation of right-of-use assets and lease liabilities.
The lease liabilities are measured at amortised cost
using the incremental rate to borrow the funds
necessary to obtain an asset of a similar value to the
right-of-use asset, with similar terms, security and
economic environment of 6% for 31 December 2023.
Critical judgement was applied by management in
assessing whether a promise is ‘sufficiently specific’,
taking into account all facts and circumstances and
any conditions specified in the arrangement (whether
explicit or implicit) regarding the promised goods or
services. This involves firstly identifying all the
activities the Group is required to perform under the
contract, and determining which activities transfer
goods and services to the customer. Where there are
multiple goods or services transferred, the
management must assess whether each good or
service is a distinct performance obligation or should
be combined with other goods or services to form a
single performance obligation.
(b) Employee benefits
Employee benefits are accrued at the current rate of
earnings. Employee benefits expected to be settled
within one year have been measured at the amounts
expected to be paid when the liability is settled, plus
related on-costs. Employee benefits payable later than
one year have been measured at the present value of
the estimated future cash outflows based on
Australian corporate bonds at the reporting date.
(c) Impairment
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.
(d) Estimation of useful lives of assets
The Group determines the estimated useful lives and
related depreciation and amortisation charges for its
property, plant and equipment. The depreciation and
amortisation charge will increase where the useful
lives are less than the previously estimated lives, or the
asset is technically obsolete.
(e) Determining the lease term
In determining the lease term, management considers
all facts and circumstances that create an economic
incentive to exercise an extension option, or not
exercise a termination option. Extension options (or
periods after termination options) are only included in
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2023 Financials
