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RACING AUSTRALIA ANNUAL REPORT 2016
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Estimation of useful lives of assets
The consolidated entity determines the estimated
useful lives and related depreciation and amortisation
charges for its property, plant and equipment and finite
life intangible assets. The useful lives could change
significantly as a result of technical innovations or
some other event. The depreciation and amortisation
charge will increase where the useful lives are less than
previously estimated lives, or technically obsolete or
non-strategic assets that have been abandoned or sold
will be written off or written down.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more
frequently if events or changes in circumstances
indicate impairment, whether goodwill and other
indefinite life intangible assets have suffered any
impairment in accordance with the accounting policy
stated in note 1. The recoverable amounts of cash
generating units have been determined based on value
in use calculations. These calculations require the use
of assumptions, including estimated discount rates
based on the current cost of capital and growth rates
of the estimated future cash flows.
Employee benefits provision
As discussed in note 1, the liability for employee benefits
expected to be settled more than 12 months from the
reporting date are recognised and measured at the
present value of the estimated future cash flows to be
made in respect of all employees at reporting date.
In determining the present value of the liability,
estimates of attrition rates and pay increases through
promotion and inflation have been taken into account.
(b) Income tax
Racing Australia Limited
Racing Australia Limited has received a private ruling
dated 18 July 2013 from the Australian Taxation Office
confirming its exemption from Income Tax under section
50-45 of the Income Tax Assessment Act. This ruling is
applicable for the financial years ended 30 June 2014
through 30 June 2016.
Thoroughbred Trainers Service Centre Limited
Current tax
Current tax is calculated by reference to the amount of
income taxes payable or recoverable in respect of the
taxable surplus or deficit for the year. It is calculated
using tax rates and tax laws that have been enacted or
substantively enacted by the reporting date. Current tax
for current and prior periods is recognised as a liability
(or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive
balance sheet liability method in respect of temporary
differences arising from differences between the carrying
amount of assets and liabilities in the financial statements
and the corresponding tax base for those items.
In principle, deferred tax liabilities are recognised for
all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that
sufficient taxable amounts will be available against
deductible temporary differences or unused tax losses
and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a
result of a business combination) which affects neither
taxable income nor accounting surplus. Furthermore,
a deferred tax liability is not recognised in relation to
taxable temporary differences arising from goodwill.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period(s)
when the assets and liability giving rise to them are
realised or settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted by
reporting date. The measurement of deferred tax
liabilities and assets reflects the tax consequences that
would follow from the manner in which the consolidated
entity expects, at reporting date, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the company intends to settle its current
tax assets and liabilities on a net basis.
Racing Australia Limited
| ACN 105 994 330 and Controlled Entities | Annual Report for the Financial Year Ended 30 June 2016