2021 Annual Report web - Flipbook - Page 38
INC ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies (continued)
(l) Lease Liability
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any
anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are
expensed in the period in which they are incurred.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or
profit and loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term lease assets by recognising the payments in relation to short
term leases as an expense in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, lease liabilities have been included in current and non-current liabilities.
(m) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the Australian Taxation Office (ATO). In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the ATO, are presented as operating cash flows.
Prior period amounts are reclassified in order to conform to the current period’s presentation.
(o) Accounting Standards Issued Not Yet Effective
At the date of authorisation of these financial statements, certain new standards, amendments and
interpretations to existing standards have been published but are not yet effective, and have not been adopted
early by the Group.
Management have assessed all standards and amendments to standards that have been issued but are not yet
effective for the year ended 31 December 2020 and do not believe any will have a material impact on the
group’s financial statements and have therefore not early adopted any of these standards.
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.