Home' Annual Report : Annual Report 2014 Contents NOTES TO THE
FOR THE YEAR ENDED 31 DECEMBER 2014
1. ADOPTION OF NEW AND REVISED
CPA Australia adopts all of the new and revised Standards
and Interpretations issued by the Australian Accounting
Standards Board (AASB) that are relevant to the operations
and effective for the current annual reporting period.
2. SUMMARY OF SIGNIFICANT
A) BASIS OF PREPARATION
The financial repor t has been prepared on an accruals basis
and is based on historical costs and does not take into
account changing money values or, except where stated,
current valuations of non-current assets. Cost is based on
the fair values of the consideration given in exchange for
assets. The accounting policies have been consistently
applied, unless otherwise stated.
The repor t is presented in Australian dollars and all values
are rounded to the nearest thousand dollars ($’000) unless
otherwise stated under the option available under ASIC
Class order 98/100.
B) STATEMENT OF COMPLIANCE
The financial report is a general purpose financial
report that has been prepared in accordance with the
Accounting Standards, Interpretations, other authoritative
pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001. Accounting standards
include Australian equivalents to International Financial
Repor ting Standards (A-IFRS). CPA Australia is a not-for-
profit entity that complies with A-IFRS which ensures that
financial statements and notes of the Consolidated Entity
comply with International Financial Reporting Standards
(IFRS). CPA Australia is not applying paragraphs specific
to Not-For-Profit entities.
CPA Australia is limited by guarantee and domiciled
The financial statements were authorised by the Board
of Directors on 27 February 2015.
C) BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the
financial statements of the Company and entities controlled
by the Company. Control is achieved where the Company
has the power to govern the financial and operating policies
of an entity so as to obtain benefits from its activities.
All inter-group transactions, balances, income and expenses
are eliminated in full on consolidation.
D) INCOME TAX
In assessing its income tax liability, CPA Australia applies the
principles of mutuality to its intangibles and other revenues
and expenses. Revenue in the form of member receipts
represents mutual income and is not subject to income tax.
Expenses associated with such mutual activities are not
tax deductible for income tax purposes. All other receipts
and payments of CPA Australia are classified for income tax
purposes in accordance with income tax legislation.
Deferred income tax is provided on all temporar y
differences at the balance sheet date between the tax
bases of asset s and liabilities and their carr ying amount s
for financial reporting purposes.
Deferred income tax liabilities are recognised for all
taxable temporary differences.
Deferred income tax assets are recognised for all deduc tible
temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable
that taxable surplus will be available against which the
deductible temporary differences and the carry-forward of
unused tax assets and unused tax losses can be used.
The carrying amount of deferred income tax assets is
reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable
surplus will be available to allow all or par t of the deferred
income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at
the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively
enac ted at the balance sheet date.
Income ta xes relating to items recognised direc tly in equity
are recognised in equity and not in the income statement.
During the year CPA Australia reviewed its tax treatment
of the investment por tfolio, the result of which was to
recognise a deferred tax liability arising on unrealised gains,
for this year and that of the previous year.
E) GOODS AND SERVICES TAX (GST)
Revenues, expenses and assets are recognised net of the
amount of GST except:
• where the GST incurred on purchases of goods and
services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost
of acquisition of the asset or as par t of the expense item
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