NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 2022New Accounting Standards and Interpretations notyet mandatory or early adoptedAustralian Accounting Standards and Interpretationsthat have recently been issued or amended but are notyet mandatory, have not been early adopted by RASWAfor the annual reporting period ended 31 March 2022.RASWA has not yet assessed the impact of these newor amended Accounting Standards and Interpretations.(b) Income TaxRASWA is exempt from income tax under section 50of the Income Tax Assessment Act 1997.(c) Cash and cash equivalentsCash and cash equivalents comprise cash on handand cash in banks, net of outstanding bank overdrafts.Bank overdrafts are shown within borrowings in currentliabilities in the statement of financial position.AASB 1060 General Purpose Financial Statements –Simplified Disclosures for For-Profit and Not-for-ProfitTier 2 Entities is operative for financial reporting periodsbeginning on or after 1 July 2021. Certain for-profit andnot for profit entities will be required to prepare generalpurpose financial statements, rather than specialpurpose financial statements, to enhance consistency,comparability and transparency of financial reporting.To reduce the cost of preparing general purposefinancial statements while maintaining their usefulness,affected entities will be required to follow the recognitionand measurement requirements under AustralianAccounting Standards, but may apply the simplifieddisclosure requirements in AASB 1060. AASB 1060is the new simplified disclosure standard developedby the AASB based on IFRS for Small and Mediumsized Entities.(d) Financial InstrumentsRecognition, initial measurement and derecognitionFinancial assets and financial liabilities are recognisedwhen RASWA becomes a party to the contractualprovisions of the financial instrument, and are measuredinitially at fair value adjusted by transaction costs, exceptfor those carried at fair value through profit or loss,which are measured initially at fair value. Subsequentmeasurement of financial assets and financial liabilitiesare described below.The following significant accounting policies have beenadopted in the preparation and presentation of thefinancial report:Classification and subsequent measurement offinancial assetsExcept for those trade receivables that do not containa significant financing component and are measuredat the transaction price, all financial assets are initiallymeasured at fair value adjusted for transaction costs(where applicable).(a) RevenueRevenue from the sale of goods is recognised whenRASWA has passed control of the goods to the buyer.Revenue from the provision of services is recognisedwhen RASWA has competed its obligations under thecontract or arrangement. Interest revenue is accruedon a time basis by reference to the amount outstandingand at the effective interest rate applicable.Contract assetsContract assets are recognised when RASWA hastransferred goods or services to the customer butwhere RASWA is yet to establish an unconditionalright to consideration. Contract assets are treatedas financial assets for impairment purposes.Contract liabilitiesContract liabilities represent RASWA's obligationto transfer goods or services to a customer and arerecognised when a customer pays consideration, orwhen RASWA recognises a receivable to reflect itsunconditional right to consideration (whichever isearlier) before RASWA has transferred the goodsor services to the customer.22R A S WA A N N U A L R E P O R T 2 0 2 2Financial assets are derecognised when the contractualrights to the cash flows from the financial asset expire,or when the financial asset and all substantial risksand rewards are transferred. A financial liability isderecognised when it is extinguished, discharged,cancelled or expires.All income and expenses relating to financial assetsthat are recognised in profit or loss are presented withinfinance costs or sundry revenue, except for expectedcredit losses of trade receivables is presented withinadministration expenses.Classifications are determined by both:• The entities business model for managing thefinancial asset• The contractual cash flow characteristics of thefinancial assetsFinancial assets are measured at amortised cost ifthe assets meet the following conditions (and are notdesignated as Fair Value through Profit or Loss [FVPL]):• They are held within a business model whose objectiveis to hold the financial assets and collect its contractualcash flows
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