Page 71 - Bradken Annual Report 2013_Page flip

Basic HTML Version

Notes to the consolidated financial statements
30 June 2013
1 Summary of significant accounting policies
(a) Basis of preparation
(b) Principles of consolidation
(ii) Associates
Associates are all entities over which the group has significant influence but not control or joint control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity
method of accounting, after initially being recognised at cost. The group’s investment in associates includes goodwill identified
on acquisition (refer to note 32).
The group’s share of its associates’ post acquisition profits or losses is recognised in profit or loss, and its share of
post acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post acquisition
movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised
as reduction in the carrying amount of the investment.
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These
policies have been consistenty applied to all years presented, unless otherwise stated. The financial statements are for the
consolidated entity consisting of Bradken Limited and its subsidiaries.
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board and the
Corporations Act 2001
. Bradken Limited is a for-
profit entity for the purpose of preparing the financial statements.
Compliance with IFRSs
The consolidated financial statements of the Bradken Limited group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement,
statement of comprehensive income, statement of changes in equity and balance sheet respectively.
Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-
for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group (refer to note 1(h)).
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Bradken Limited (''company'' or
''parent entity'') as at 30 June 2013 and the results of all subsidiaries for the year then ended. Bradken Limited and its
subsidiaries together are referred to in this financial report as the Group or the consolidated entity.
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in
note 3.
New and amended standards adopted by the group
None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1
July 2012 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future
However, amendments made to AASB 101
Presentation of Financial Statements
effective 1 July 2012 now require the
statement of comprehensive income to show the items of comprehensive income grouped into those that are not permitted to
be reclassified to profit or loss in a future period and those that may have to be reclassified if certain conditions are met.
Page 35
Bradken Limited