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APN
annual report
2011
notes to the financial statements
APN News & Media Limited and Controlled Entities
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
The excess of the consideration transferred, the amount of any non-
controlling interest in the acquiree and the acquisition date fair value
of any previous equity interest in the acquiree over the Group’s share
of the net identifiable assets acquired is recorded as goodwill.
(i) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are
not subject to amortisation and are tested annually for impairment
and whenever there is an indication that they may be impaired.
Assets that are subject to amortisation are tested for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment charge
is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets
or groups of assets (cash-generating units). Non-financial assets
other than goodwill that suffer an impairment are reviewed for
possible reversal of the impairment at each reporting date.
(j) Cash and cash equivalents
For cash flow presentation requirements, cash and cash equivalents
comprises cash on hand, deposits held at call with banks and
investments in money market instruments, net of outstanding
bank overdrafts.
(k) Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for doubtful debts. Trade
receivables are generally settled within 60 days.
Debts which are known to be uncollectible are written off. A
provision for impairment of trade receivables is established where
there is objective evidence that the Group will not be able to collect
all amounts due according to the original terms of the receivable.
The carrying amount of the asset is reduced through the use of a
provision account and the amount of the loss is recognised in the
income statement within other expenses. When a trade receivable is
uncollectible, it is written off against the provision account for trade
receivables. Subsequent recoveries of amounts previously written
off are credited against other income in the income statement.
(l) Inventories
Inventories are stated at the lower of cost and net realisable value.
Costs are assigned to inventory quantities on hand at balance date
using the first in first out basis. Cost comprises material, labour
and an appropriate proportion of fixed and variable overheads.
Net realisable value is the estimated selling price in the ordinary
course of the business less the estimated cost of completion and
the estimated cost necessary to make the sale.
(m) Non-current assets held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale
if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use. They are measured
at the lower of their carrying amount and fair value less costs to sell,
except for assets such as deferred tax assets, assets arising from
employee benefits, financial assets and investment property that are
carried at fair value and contractual rights under insurance contracts,
which are specifically exempt from this requirement.
Non-current assets (including those that are part of a disposal group)
are not depreciated or amortised while they are classified as held
for sale. Interest and other expenses attributable to the liabilities of
a disposal group classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a
disposal group classified as held for sale are presented separately
from the other assets in the balance sheet. The liabilities of a disposal
group classified as held for sale are presented separately from other
liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been
disposed of or is classified as held for sale and that represents a
separate major line of business or geographical area of operations, is
part of a single coordinated plan to dispose of such a line of business
or area of operations, or is a subsidiary acquired exclusively with a
view to resale. The results of discontinued operations are presented
separately on the face of the income statement.
(n) Financial assets
In 2009 the Group elected to early adopt AASB 9
Financial
Instruments
.
(i) Classification and initial measurement of financial assets
Financial assets are initially measured at fair value, plus transaction
costs, except for those financial assets classified as at fair value
through profit or loss which are initially measured at fair value.
Financial assets are subsequently measured at fair value or where
certain criteria are met at amortised cost.
(ii) Financial assets at amortised cost
The Group’s loans and receivables meet the requirements for
measurement at amortised cost based on the objectives for
which they are held and the contractual terms.
(iii) Financial assets at fair value
The Group’s investments in equity instruments are measured at
fair value, determined in the manner described in note 33. At initial
recognition, the Group can make an irrevocable election (on an
instrument-by-instrument basis) to recognise gains and losses
on equity instruments not held for trading in other comprehensive
income. Otherwise all gains and losses are recognised in profit
or loss.
For financial assets measured at amortised cost the Group assesses
at each balance sheet date whether there is objective evidence that
a financial asset or a group of financial assets is impaired.
(o) Derivatives
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently remeasured
to their fair value at each reporting date. Fair value is determined
with reference to quoted market prices. The method of recognising
the resulting gain or loss depends on whether the derivative is
designated and effective as a hedging instrument, and if so, the
nature of the item being hedged. The Group designates certain
derivatives as either hedges of the fair value of recognised assets
or liabilities or a firm commitment (fair value hedges) or hedges
of highly probable forecast transactions (cash flow hedges).