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Notes to the Consolidated Financial Statements
30 June 2013
Notes to the consolidated financial statements
30 June 2013
3 Critical accounting estimates and judgements
(a) Critical accounting estimates and assumptions
(i) Estimated impairment of goodwill
(ii) Estimated percentage completion for major contracts
(iii) Equity accounting for Austin Engineering
(iv) Intangibles
4 Segment information
(a) Description of segments
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note
1(p). The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of assumptions. Refer to note 14 for details of these assumptions and the potential impact of
changes to the assumptions.
The Group reviews the percentage of completion for its major contracts monthly including assessing costs to be incurred to
complete the project in accordance with the accounting policy stated in note 1(e) and note 1(l). These assessments require an
estimate of the remaining labour and material costs for the projects.
The Group has equity accounted the latest available published results of Austin Engineering Limited for the half year ending 31
December 2012 and extrapolated these to 30 June 2013 based on market conditions and analyst estimates. Differences
identified when Austin Engineering Limited publishes results for the 2013 financial period will be adjusted in Bradken Limited's
interim report for the half year ending 31 December 2013.
The group values identifiable intangibles acquired in a business combination based on a combination of independent valuations
in some cases and management's estimate of the net present value of estimated future cash flows of the assets. Identifiable
intangible assets are amortised over their estimated useful lives. Given the estimates involved, management review the carrying
value of these assets annually for impairment.
Segment revenues, expenses and results include transfers between segments. Sales of scrap between controlled entities are
made on an "arm's-length" basis and are eliminated on consolidation. All other transfers are made at variable cost and are
eliminated on consolidation.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment. Segment assets include
all assets used by a segment and consist primarily of receivables, inventories and property, plant and equipment, net of related
provisions. Segment liabilities consist primarily of trade and other creditors, employee benefits and provision for service
The "all other" segment also represents other smaller businesses including Cast Metal Services.
Responsibility for the North American based Resource business previously included as part of the Engineered Products segment
has been moved to the Mining Products segment. The Mineral Processing business previously reporting within the Mining
Products business has been removed from that segment following the acquisition and consolidation of the Canadian based
Norcast business in 2011 and is now reported as a separate segment. Management has concluded that the results of the
previously reported Industrial segment is no longer required to be separately disclosed. The segment does not meet any
quantitative thresholds required by AASB 8 and is considered by management to be of decreasing relevance as the Group's
operations continue to expand. Management has concluded that the results of this operation are better included in the "all other
segments" column. Comparative disclosures have also been amended to reflect these changes.
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision-maker has been identified as the Managing Director.
Mining Products consists of design, supply and service of wear components for all types of earth moving in the Mining and
Quarry industries. Mineral Processing consists of design supply and service of mill liner components in the Mineral Processing
industries. Rail is a package provider of Freight Rollingstock products and services including freight wagons, bogies, drawgear,
inventory management, spare and renewed parts and the maintenance and refurbishment of rollingstock. Engineered Products,
based in the North America, is a supplier of cast parts to the Energy, Power, Cement, Industrial and Rail Transport industries
specialising in large (greater than 4,500 kg) highly engineered steel castings.
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Bradken Limited