Home' Annual Report : Annual Report 2015 Contents E. GOODS AND SERVICES TAX (GST)
Revenues, expenses and asset s 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 as
• where receivables and payables are stated inclusive of GST
The net amount of GST recoverable from, or payable to,
the taxation authority is included as par t of receivables or
payables in the balance sheet.
Cash flows are included in the Statement of cash flows on
a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable
from, or payable to, the taxation authority, are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
F. FOREIGN CURRENCY
All foreign currency transactions are shown in Australian
Foreign currency transactions
Transactions in foreign currencies are initially recorded
in the func tional currency at the exchange rates ruling at
the date of the transac tion. Monetar y asset s and liabilities
denominated in foreign currency are retranslated at the
rate of exchange ruling at the balance sheet date.
Non-monetar y asset s and liabilities carried at fair value that
are denominated in foreign currencies are translated at the
rates prevailing at the date the fair value was determined.
Exchange differences are recognised in profit and loss in
the period they occur.
Foreign currency operations
The assets and liabilities of CPA Australia’s overseas
operations are translated at the exchange rates prevailing at
the reporting date. Income and expense items are translated
at the average exchange rate for the period unless exchange
rates fluctuate significantly. Exchange differences arising,
if any, are recognised in the foreign currency translation
reserve, and recognised in the profit and loss.
Revenue is recognised net of discount s to the ex tent
that it is probable that the economic benefits will flow
to CPA Australia and that it can be reliably measured.
Member fees and subscriptions
The subscription year runs 1 Januar y to 31 December.
Subscriptions are payable annually in advance. Only those
membership fees and subscription payments that are
attributable to the current financial year are recognised
as revenue. Fees and subscription payments that relate
to future periods are shown in the Statement of financial
position as subscriptions and fees in advance under the
heading of current liabilities – other.
Interest revenue is accrued on a time basis, by reference
to the principal outstanding and at the effective interest
rate applicable, which is the rate that exac tly discounts
estimated future cash receipts through the expected life
of the financial asset to that asset’s net carrying amount.
Income from investments
Revenue is recognised when the income is earned.
Sale of non-current assets
The net gain / (loss) of non-current asset sales are included as
revenue / (expenses) at the date control passes to the buyer,
usually when an unconditional contract of sale is signed.
The net gain or loss on disposal is calculated as the
difference between the carrying amount of the asset at the
time of disposal and the net proceeds on disposal.
Assets which satisfy the criteria in AASB 5 Non-current
Assets Held for Sale and Discontinued Operations as assets
held for sale are transferred to current asset s and separately
disclosed as non-current assets held for sale on the face
of the Statement of financial position. These assets are
measured at the lower of carrying amount and fair value less
costs to sell. These assets cease to be depreciated from the
date on which they satisfy the “held-for-sale” criteria.
Revenue is recognised when control of the contribution
or right to receive the contribution is received.
H. LOANS AND RECEIVABLES
The terms of trade are 30 days from invoice date.
Trade receivables, loans and other receivables that have
fixed or determinable payments that are not quoted in
an active market are classified as ‘loans and receivables’.
Loans and receivables are measured at amortised cost
using the effective interest rate method less impairment.
An estimate for doubtful debts is made when collection of
the full amount is no longer probable. Bad debts are written
off when identified.
I. PROPERTY, PLANT AND EQUIPMENT
All classes of assets are stated at cost less accumulated
depreciation and any impairment.
Depreciation is calculated on a straight line basis over the
estimated useful life of the assets (excluding freehold land)
Property, plant and equipment
Information technology assets
(computer hardware classified as property, plant and
equipment in the Statement of financial position)
The carrying values of property, plant and equipment
are reviewed for impairment when events or changes
in circumstances indicate the carrying value may not be
recoverable. If such an indication exists and where carrying
values exceed the recoverable amount, the asset is written
down to the recoverable amount. Recoverable amount is
the greater of fair value less costs to sell and value in use.
Land and buildings
Valuations are obtained biennially and were obtained in
2015. All valuations received were in excess of their recorded
value at balance date. They reflect independent assessments
of the open market value of land and buildings based on
The initial cost of an asset includes an estimate of the cost
of dismantling and removing the item and restoring the
site on which it is located. This is particularly relevant to
restoration provisions in property leases taken up by the
Consolidated Entity where there exists an obligation to
restore the property to its original condition. These costs
are included in the value of the leasehold improvements
with a corresponding provision for the ‘restoration’ taken up.
J. IMPAIRMENT OF INTANGIBLES AND
OTHER TANGIBLE ASSETS
At each reporting date, the Consolidated Entity reviews the
carrying amounts of its intangible and other tangible assets
to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where
the asset does not generate cash flows that are independent
from other assets, the Consolidated Entity estimates the
recoverable amount of the cash-generating unit to which
the asset belongs. Where a reasonable and consistent basis
of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis
can be identified.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have
not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in
profit or loss immediately, unless the relevant asset is carried
at fair value, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (cash-
generating unit) in prior years. A reversal of an impairment
loss is recognised in profit or loss immediately, unless the
relevant asset is carried at fair value, in which case the reversal
of the impairment loss is treated as a revaluation increase.
CPA AUSTRALIA 2015 INTEGRATED REPORT
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