Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that asset’ s net carrying amount.
j) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in nature.
k) Investment property Investment property, which is property held to earn rentals and / or capital appreciation, is carried at cost, including transaction costs.
l) Income tax The company is exempt from income tax under s50-5 of the Income Tax Assessment Act, as it is an income tax exempt charitable entity. As a consequence, there is no income tax attributable to the operating result.
m) General reserves
Salary Recovery Fund Excess or under recoveries of wages and salaries expenditure re-charged by Central Office or Centres are transferred to the Salary Recovery Fund. The Board of Directors has resolved that the balance of this reserve should not exceed $ 800,000 as at 31 December in any year.
Fundraising Reserve Net proceeds of fundraising are retained in the Fundraising Reserve.
n) Donations in kind Over the course of the year the company has received donations in kind from a number of local councils in the form of the right to use premises at discounted rent. The company is of the view that it is not feasible to fair value the services received accurately and as such it has not brought to account discounted rent as a donation through its income statement.
3.
Critical accounting judgments and key sources of estimation uncertainty In the application of A-IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revisions and future periods if the revision affects both current and future periods.
Continues...
113th Annual Report 2008 27