Page 45 - Bauxite Resources Annual Report 2013

Notes to the Financial Statements cont.
(d) Segment reporting
A business segment is identified for a group of assets and operations engaged in providing products or services that are subject
to risks and returns that are different to those of other business segments. A geographical segment is identified when products
or services are provided within a particular economic environment subject to risks and returns that are different from those of
segments operating in other economic environments.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts
and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of
interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised
and the amount ultimately received is interest revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and
rewards of ownership of the goods and the cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate
inherent in the instrument.
Proceeds from a Research & Development tax incentive is recognised as a government grant in accordance with AASB 120
Accounting for Government Grants, and disclosed as Other Income.
(f) Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at
the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
(g) Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or,
if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are
included in other short-term and long-term payables. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are
depreciated over the shorter of the asset’s useful life and the lease term.
Leases where a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified
as operating leases (note 21). Payments made under operating leases (net of any incentives received from the lessor) are charged
to the income statement on a straight-line basis over the period of the lease.
Annual Report 2013 Bauxite Resources 43