(a) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
(b) Foreign currency translation
Foreign currency transactions are translated into the functional currency of the Company using the exchange rates prevailing at the dates of transactions. Foreign exchange gains or losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
(c) Impairment of assets
The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired.
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.
Significant assets are tested for impairment individually. The remaining financial assets are assessed in groups that share similar credit risk characteristics.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. The loss is recognised in profit or loss.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company, on or before the end of the reporting period but not distributed at the end of the reporting period. Provision must be made in compliance with s 254T of the Corporations Act 2001 (Cth).
(e) Revised standards and interpretations applied
The Company has applied the following revised standards and interpretations for the first time in the financial year commencing 1 July 2018.
(i) AASB 15 Revenue from Contracts with Customers
AASB 15 introduces a 5-step process for revenue recognition from contracts with customers. The standard requires that revenue be recognised when the performance obligation is met, namely when the promised good or service is transferred to the customer. AASB 15 replaces all previous revenue related accounting standards. AASB 15 was applied by the Company from 1 July 2018.
Revenue from services is recognised at the point the services are provided. Revenues are accounted for net of discounts, rebates and returns.
Revenue generated from commercial dockings and that received from ASC (via depreciation pass-through and capital charge) meet the definition of revenue under this new revenue standard. There will be no significant impact to ANI’s financial statements for these revenue streams.
In prior years, depreciation pass through and capital charge income from AWD was recorded as revenue (under AASB 118). New licences were signed with both AWD and Luerssen, effective July 2018, and are classified as operating leases under AASB 117 Leases.
This is a change in presentation from the prior year and the composition of revenue from continuing operations is reflected in Note 5(a).
(ii) AASB 9 Financial Instruments
This standard addresses the classification, measurement and derecognition of financial assets that are designated at fair value through profit and loss and the change in the fair value of the financial liabilities is not due to the change in the Company’s own credit risk.
The adoption of AASB 9 has not had a significant effect on the Company.
(f) Impact of standards issued but not yet applied
Certain new accounting standards, interpretations and amendments have been published that are not mandatory for 30 June 2019 reporting periods and have not been early adopted by the Company, including AASB 16 Leases. The Company’s assessment of the impact of this new standard is set out below.
AASB 16 Leases (effective for the 30 June 2020 financial year)
This standard will replace AASB 117 Leases. The new standard introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying assets are of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments.
The leases impacted by the new standard are:
- the 3-year lease of office space in Port Adelaide where ANI is the lessee
- commercial property leases where ANI is the lessor
- licences with AWD and Luerssen where ANI is the lessor.
The impact of the new standard on the financials is not expected to be significant.