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NOTE 21 (CONTINUED)
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
statements when it is first adopted for the
year ending 30 June 2019.
(iii) AASB 16 Leases
AASB 16 replaces AASB 117 Leases and some
lease-related Interpretations. AASB 16 requires
all leases to be accounted for on balance sheet
by leases with minor exceptions, provides new
guidance on the application of the definition of
lease and on sale and lease back agreements,
largely retains the existing lessor accounting
requirements and requires new and different
disclosures about leases. AASB 16 is effective
for annual reporting periods beginning on
or after 1 January 2019 but may require
retrospective adjustments for the 2018/19
comparative disclosures. The Group does
not currently intend to early adopt.
The Group is yet to undertake a detailed
assessment of the impact of AASB
16. However, based on the preliminary
assessment, there are some likely impacts
when it is first adopted for the year ending
30 June 2020 including:
•
•
Significant increase on the administration
requirements of leases,
•
•
Increase in the number of lease assets
and financial liabilities recognised on the
balance sheet, although the quantum is
likely to be small in relation to the size
of the balance sheet,
•
•
Operating cash outflows will be lower
and financing cash flows will be higher
in the statement of cash flows as principal
repayments and interest on all lease
liabilities will now be included in financing
activities, although the quantum is likely
to be small in relation to the total operating
and financing cash flows.
AASB 16 is a new standard that introduces a
single lessee accounting model and requires a
lessee to recognise assets and liabilities for all
leases with a term of more than 12 months,
unless the underlying asset is of low value.
Early adoption of this standard is permitted
only if the Group has adopted AASB 15
Revenue from Contracts with Customers.
AASB 16 substantially carries forward the
lessor accounting requirements in AASB
117 Leases. Accordingly, a lessor continues
to classify its leases as operating leases or
finance leases, and to account for those
two types of leases differently.
AASB 16 also requires enhanced disclosures
to be provided by lessors that will improve
information disclosed about a lessor’s risk
exposure, particularly to residual value risk.
There are no other standards that have
been issued or amended but are not yet
effective that are expected to have a
material impact on the Group in the
current or future reporting periods and
on foreseeable future transactions.
(c) Parent entity financial
information
The financial information for the Parent
entity, Australian Rail Track Corporation Ltd,
disclosed in note 20 has been prepared
on the same basis as the consolidated
financial statements.
(d) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements
incorporate the assets and liabilities of all
entities controlled by the Australian Rail Track
Corporation Ltd (‘’Company’’ or ‘’Parent
entity’’) as at 30 June 2016 and the results of
the controlled entities for the year then ended.
Australian Rail Track Corporation Ltd and
its controlled entities are referred to in this
financial report as the “Consolidated Entity”
or “the Group”. The effects of all transactions
between entities in the Consolidated Entity
are eliminated in full.
100