(f) Access revenue
Access revenue recorded in the Consolidated Income
Statement comprises amounts received and receivable
by the consolidated entity granting operators access to
the rail network during the year.
(g) Interest income and
borrowing expenses
Interest income is recognised as interest accrues using
the effective interest method. This is a method of
calculating the amortised cost of a financial asset and
allocating the interest income over the relevant period
using the effective interest rate, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the
net carrying amount of the financial asset. Borrowing
costs directly attributable to the acquisition,
construction or production of a qualifying asset (i.e.
an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale) are
capitalised as part of the cost of that asset. All other
borrowing costs are expensed in the period they occur.
Borrowing costs that are not directly attributable
to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss using
the effective interest method. Borrowing costs consist
of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(h) Recoveries and expenses
associated with rail access
related incidents
Income attributable to insurance or other recoveries
arising from rail access related incidents is only
recognised where a contractual agreement is in place
and receipt of amounts outstanding is virtually certain.
Costs of rectification are recognised when incurred.
Where the Group has suffered damage to its rail
network due to other parties, the recourse of
commercial negotiation and, if not successful, legal
proceedings are initiated, as appropriate.
Contingent liabilities and assets are reviewed
throughout the year and finalised at reporting date
for inclusion in the financial statements. Inclusion
of liabilities or assets relating to rail access related
incidents occurs where the Group can reliably measure
costs or recoveries.
(i) Government grants
Grants received from the government by the Group fall
into two distinct categories and the treatment for each
is described below:
(i) Where the Grants have attached conditions and/
or are project specific, they are recognised at their fair
value and initially credited to Deferred Income upon
receipt, then recognised in the Consolidated Income
Statement over the period necessary to match them
with the costs that they are intended to compensate.
(ii) Where those grants relate to expenditure that is to be
capitalised, they are credited to the Consolidated Income
Statement on a straight line basis over the expected lives
of the related assets from the date of commissioning.
Grants that are related to expenditures that are not
to be capitalised, are credited to the Consolidated
Income Statement as the relevant expense is incurred.
(j) Major periodic maintenance
Maintenance of infrastructure assets is classified as
major periodic maintenance if it is part of a systematic
planned program of works, occurs on a cyclical basis
and is significant in monetary values. Major periodic
maintenance may include significant corrective
works, component replacement programs, and
similar activities and these costs are expensed in the
consolidated entity’s accounts.
(k) Income tax
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be
recovered fromor paid to the taxation authorities based
on the current period’s taxable income. The tax rates and
tax laws used to compute the amount are those that are
enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary
differences at the reporting date between the tax
bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
NOTE 01
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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