net carrying amount of the financial asset. Borrowing
costs directly attributable to the acquisition,
construction or production of a qualifying asset are
capitalised as part of the cost of that asset.
Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying
asset are recognised in the income statement using
the effective interest method. Borrowing costs consist
of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(k) 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.
(l) Government grants
Grants from the government are recognised
approximately at their fair value where there is
a reasonable assurance that the grant will be
received and the group will comply with all attached
conditions. Where the Grants have attached
conditions and/or are project specific, they are
recognised approximately 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.
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 compensate the Group
for expenses incurred are recognised in the income
statement on a systematic basis in the periods in
which expenses are recognised.
(m) Infrastructure maintenance
Infrastructure 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.
(n) Income tax
Current tax assets and liabilities for the current and
prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities
based on the current period’s taxable income and any
adjustments in respect of prior years. 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 liabilities (DTLs) are recognised
for all taxable temporary differences between the
carrying amount of assets and liabilities for financial
reporting and the amounts used for taxation purposes.
Deferred income tax assets (DTAs) are recognised for
all deductible temporary differences, carry forward of
unused tax offsets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences
and the carry forward of unused tax offsets and unused
tax losses can be utilised.
Division 58 of the Income Tax Assessment Act 1997
(“Division 58”), has entitled the consolidated entity
to value certain assets, for taxation purposes, using
pre-existing audited book values or the notional
written down values of the assets as appropriate. This
effectively means the tax depreciable value of these
rail infrastructure and related assets significantly
exceeds the carrying value. Accordingly, Division 58
results in significant deductible temporary differences
and potential DTAs. The carrying amount of DTAs is
reviewed at each reporting date and adjusted to the
extent that it is probable that sufficient taxable profit
will be available to allow all or part of the deferred
income tax asset to be utilised.
NOTE 01
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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