CRN management agreement with the NSW
Government. The CRN management agreement
was terminated from 14 January 2012.
(f) 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.
(g) 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.
(h) 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. 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.
Deferred income tax liabilities (DTLs) are
recognised for all taxable temporary differences.
Deferred income tax assets (DTAs) are recognised for
all deductible temporary differences, carry forward
of unused tax credits 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
credits and unused tax losses can be utilised.
Division 58 of the Income Tax Assessment Act
1997 (“Division 58”), has entitled the consoli-
dated 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 effectivelymeans 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 reduced to the extent that
it is no longer probable that sufficient taxable profit
will be available to allowall or part of the deferred
income tax asset to be utilised.
Unrecognised DTAs are reassessed at each
reporting date and are recognised to the extent
Note 01
Summary of significant accounting policies (continued)
62
