Page 54 - Bauxite Resources Annual Report 2014

52 | Bauxite Resources Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements cont.
Annual Report 2014 Bauxite Resources 52
AASB 11 replaces AASB 131 ‘Interests in Joint Ventures’, and the guidance contained in a related interpretation, Interpretation
113 ‘Jointly Controlled Entities – Non-Monetary Contributions by Venturers’, has been incorporated in AASB 128 (as revised in
2011). AASB 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and
accounted for. Under AASB 11, there are only two types of joint arrangements – joint operations and joint ventures. The
classification of joint arrangements under AASB 11 is determined based on the rights and obligations of parties to the joint
arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to
the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the
parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities,
relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
(i.e. joint venturers) have rights to the net assets of the arrangement. Previously, AASB 131 contemplated three types of joint
arrangements – jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint
arrangements under AASB 131 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement
that was established through a separate entity was accounted for as a jointly controlled entity).
The initial and subsequent accounting of joint ventures and joint operations is different. Investments in joint ventures are
accounted for using the equity method (proportionate consolidation is no longer allowed). Investments in joint operations are
accounted for such that each joint operator recognises its assets (including its share of any assets jointly held), its liabilities
(including its share of any liabilities incurred jointly), its revenue (including its share of revenue from the sale of the output by the
joint operation) and its expenses (including its share of any expenses incurred jointly). Each joint operator accounts for the assets
and liabilities, as well as revenues and expenses, relating to its interest in the joint operation in accordance with the applicable
Standards.
The directors of the Company reviewed and assessed the classification of the Group's investments in joint arrangements in
accordance with the requirements of AASB 11. The directors concluded that the Group's investment in Bauxite Alumina Joint
Ventures Pty Ltd, which was classified as a jointly controlled entity under AASB 131 and was accounted for using the
proportionate consolidation method, should be classified as a joint venture under AASB 11 and accounted for using the equity
method.
The change in accounting of the Group's investment in Bauxite Alumina Joint Ventures Pty Ltd has been applied in accordance
with the relevant transitional provisions set out in AASB 11. Comparative amounts for 2013 have been restated to reflect the
change in accounting for the Group's investment in Bauxite Alumina Joint Ventures Pty Ltd. The initial investment as at 1 July
2012 for the purposes of applying the equity method is measured as the aggregate of the carrying amounts of the assets and
liabilities that the Group had previously proportionately consolidated (see the tables below for details).
(i) Adjustments made to statement of financial position
As at 30 June 2013
Under previous
accounting
policy AASB11 1 As presented
$ $ $
CURRENT ASSETS
Cash and cash equivalents 43,881,153 (395,150) 43,486,003
Trade and other receivables 1,856,906 409,979 2,266,885
TOTAL CURRENT ASSETS 45,738,059 14,829 45,752,888
NON CURRENT ASSETS
Other financial assets 480,043 (52,115) 427,928
Property, plant and equipment 5,981,261 (81,655) 5,899,606
Intangible assets - - -
TOTAL NON CURRENT ASSETS 6,461,304 (133,770) 6,327,534
TOTAL ASSETS 52,199,363 (118,941) 52,080,422
CURRENT LIABILITIES
Trade and other payables 419,446 (150,353) 269,093
Provisions 111,469 (30,395) 81,074
TOTAL CURRENT LIABILITIES 530,915 (180,748) 350,167