Racing Australia Annual Report 2015
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months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either
expected to be settled in normal operating cycle; it is
held primarily for the purpose of trading; it is due to be
settled within 12 months after the reporting period; or
there is no unconditional right to defer the settlement
of the liability for at least 12 months after the reporting
period. All other liabilities are classified as non-current.
(q) Trade and other receivables
Trade receivables are initially recognised at fair value
and subsequently measured at amortised cost using
the effective interest method, less any provision for
impairment. Trade receivables are generally due for
settlement within 30 days.
Collectability of trade receivables is reviewed on
an ongoing basis. Debts which are known to be
uncollectable are written off using the carrying amount
directly. A provision for impairment of trade receivables
is raised when there is subjective evidence that the
company will not be able to collect all amounts due
according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability
that the debtor will enter into bankruptcy or financial
reorganisation and default or delinquency in payments
(more than 60 days overdue) are considered indicators
that the trade receivable may be impaired. The amount
of the impairment allowance is the difference between
the assets carrying amount and the present value of
estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short term
receivables are not discounted if the discounting is
immaterial.
Other receivables are recognised at amortised cost,
less any provision for impairment.
(r) Leases
The determination of whether an arrangement is or
contains a lease is based on the substance of the
arrangement and requires an assessment of whether
the fulfilment of the arrangement is dependent on the
use of a specific asset or assets and the arrangement
conveys a right to use the asset.
A distinction is made between finance leases, which
effectively transfer from the lessor to the lessee
substantially all the risks and benefits incidental to the
ownership of the leased assets, and operating leases,
under which the lessor effectively retains substantially
all such risks and benefits.
Finance leases are capitalised. A lease asset and
liability are established at the fair value of the leased
assets, or if lower, the present value of minimum lease
payments. Lease payments are allocated between
the principal component of the lease liability and the
finance costs, so as to achieve a constant rate of
interest on the remaining balance of the liability.
Lease assets acquired under a finance lease are
depreciated over the assets useful life or over the
shorter of the assets useful life and the lease term if
there is no reasonable certainty that the consolidated
entity will obtain ownership at the end of the lease term.
Operating lease payments, net of any incentives
received from the lessor, are charged to profit and loss
on a straight line basis over the term of the lease.
(s) Borrowings
Loans and borrowings are initially recognised at the fair
value of the consideration received, net of transaction
costs. They are subsequently measured at amortised
cost using the effective interest method.
(t) Provisions
Provisions are recognised when the consolidated
entity has a present (legal or constructive) obligation
as a result of a past event. It is probable that the
consolidated entity will be required to settle the
obligation, and a reliable estimate can be made of the
amount of the obligation. The amount recognised as
a provision is the best estimate of the consideration
required to value the present obligation at the reporting
date, taking into account the risks and uncertainties
surrounding the obligation. If the time value of money
is material, provisions are discounted using a current
pre-tax rate specific to the liability. The increase in
the provision resulting from the passage of time is
recognised as a finance cost.
(u) Business combinations
The acquisition method of accounting is used to
account for business combinations regardless of
whether equity instruments or other assets are
acquired.
The consideration transferred is the sum of the
acquisition date fair values of the assets transferred,
equity instruments issued or liabilities incurred by the
acquirer to former owners of the acquiree and the
Racing Australia Pty Ltd
| ACN 105 994 330 and Controlled Entities | Annual Report for the Financial Year Ended 30 June 2015
