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Forest NSW Annual Report 2012

Forests NSW Consolidated Annual Financial Reports Year ended 30 June 2012 ABN 43 141 857 613 Notes to and forming part of the financial statements For the year ended 30 June 2012 appropriate classification and designation the manner in which the entity expects, at (g) Inventories, Work in economic conditions, the Group’s operation carrying amount of its assets and liabilities. Progress and Seedlingsthe reporting date, to recover or settle the in accordance with the contractual terms, or accounting policies and other pertinent Inventories and Work in Progress (WIP)Deferred tax assets and liabilities are offset conditions as at the acquisition date. This includes the separation of embedded when they relate to income taxes levied by realisable value. In the case of materials andare stated at the lower of cost and net derivatives in host contracts by the acquiree. the same taxation authority and Forests NSW parts, cost comprises purchase price and intends to settle its current tax assets and incidental expenses. The valuation of WIP (e) Income Tax (National Tax liabilities on a net basis. and finished goods is based on direct costs Equivalents Regime) losses will be carried forward as an asset overheads.plus an appropriate proportion of productionDeferred tax asset items relating to tax As of 1 July 2001, Forests NSW was subject to as this benefit has largely arisen from the Seeds harvested from biological assets are the National Tax Equivalents Regime (NTER) deductibility of plantation establishment measured at fair value less estimated point which requires PTEs to be subject to the same activity. Whilst recognising the significant of sale costs at the time of harvest. If market taxes, including income tax and goods and year involved (to maturity of these determined prices are not available, seeds services tax, as private sector organisations. plantation assets), as these activities are measured at value in use. On the initial Prior to this date Forests NSW was subject to constitute Forests NSW core business, there recognition of seeds at their fair value less the state based Tax Equivalents Regime. is high likelihood the benefit will be fully point of sale costs, a value is recorded in the realised in future years. Statement of Comprehensive Income. Current tax Current tax is calculated by reference to the Current and deferred tax for the year (h) Property, Plant and respect of the taxable profit or tax losses for the Movements in current and deferred tax are Equipment amount of income tax payable or recoverable in year. It is calculated using tax rates and tax laws recognised as an expense or income in the Forests NSW property, plant and equipment is that have been enacted or substantively enacted Statement of Comprehensive Income, except governed by policy TPP06-6 for capitalisation. by reporting date. Tax for the current year/prior when they relate to items credited or debited year is recognised as a liability (or asset) to the directly to equity, in which case the deferred (i) Recognition and Measurement extent that it is unpaid (or refundable). tax is also recognised directly in equity. Items of property, plant and equipment are initially measured at their cost, and are Deferred tax Other Taxes (GST) subsequently measured at their fair value in accordance with NSW Treasury Accounting Deferred tax is accounted for using the ‘balance Revenues, expenses and assets are recognised Policy TPP 07-1 Valuation of Physical Non- sheet liability method’. Temporary differences net of the amount GST, except: Current Assets at Fair Value. are differences between the tax base of an the amount of GST incurred by Forests NSW as asset or liability and its carrying amount in the Cost includes expenditure that is directly Statement of Financial Position. The tax base of attributable to the acquisition of the asset. Thea purchaser that is not recoverable from the an asset or liability is the amount attributed to cost of self-constructed assets includes theAustralian Taxation Office is recognised as part that asset or liability for tax purposes. cost of materials and direct labour, any otherof the cost of acquisition of an asset or as part of an item of expense. costs directly attributable to bringing the asset In principle, deferred tax liabilities are to a working condition for its intended use,Receivables and payables are stated with the recognised for all taxable temporary differences. and any costs of dismantling and removing theamount of GST included. Deferred tax assets are recognised to the items and restoring the site on which they are extent that it is probable that sufficient taxable Cash flows are presented on a gross basis. The located. Purchased software that is integral amounts will be available against which GST components of cash flows arising from to the functionality of the related equipment deductible temporary differences or unused tax investing or financing activities which are is capitalised as part of the equipment. losses and tax offsets can be utilised. However, recoverable from or payable to the ATO are Borrowings costs related to the acquisition, deferred tax assets and liabilities are not presented as operating cash flows. construction or production of qualifying assets recognised if the temporary differences giving are capitalised. rise to them arise from the initial recognition (f) Trade and Other Receivables When parts of an item of property, plant and of assets and liabilities (other than as a result of equipment have different useful lives, they are a business combination) which affects neither Receivables are recognised initially at fair accounted for as separate items of property, taxable income nor accounting profit. value, usually based on the transaction cost plant and equipment. or face value. Subsequent measurement Deferred tax assets and liabilities are is at amortised cost using effective interest Gains and losses on disposal of an item of measured at the tax rates that are expected method, less an allowance for any impairment property, plant and equipment are determined to apply to the year(s) when the asset and of receivables. by comparing the proceeds from disposal with liability giving rise to them are realised or the carrying amount of property, plant and settled, based on tax rates (and tax laws) that Trade and other receivables are constantly equipment and are recognised net within “other have been enacted or substantively enacted reviewed and impaired when the debt is revenue” in the Statement of Comprehensive by reporting date. The measurement of deemed uncollectible. Bad debts are written Income. When revalued assets are sold, the deferred tax liabilities and assets reflects the off as incurred. Credit sales are generally on 7, amounts included in the revaluation reserve are tax consequences that would follow from 14 or 30 days settlement terms. transferred to retained earnings. 58 Forests NSW Annual Report 2011–12 Social, Environmental and Economic Performance


Forest NSW Annual Report 2012
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