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Investments in subsidiaries are accounted for
at cost in the individual financial statements of
Australian Rail Track Corporation Ltd and are
not material to the Group.
(e) Revenue recognition
Revenue is measured at the fair value of
the consideration received or receivable to
the extent it is probable the economic benefit
will flow to the Group and the revenue can
be reliably measured. Amounts disclosed as
revenue are net of returns, trade allowances,
rebates and amounts collected on behalf
of third parties.
(f) Access revenue
Access revenue recognised comprises
amounts received and receivable by the
Group granting operators access to the
rail network during the year.
(g) Interest revenue and
borrowing expenses
Interest revenue and borrowing costs
are recognised as they accrue using the
effective interest method. This is a method of
calculating the amortised cost of a financial
asset or liability and allocating the interest and
other costs over the relevant period using the
effective interest rate, which is the rate that
exactly discounts estimated future cash flows
through the expected life of the financial asset
or liability to the net carrying amount of the
financial asset or liability.
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 consist of
interest and other costs incurred in connection
with the borrowing of funds.
Borrowings are initially recognised at fair value,
net of transaction costs incurred. Borrowings
are subsequently measured at amortised
cost. Fees paid on the establishment of loan
facilities are recognised as transaction costs of
the loan to the extent that it is probable that
some or all of the facility will be drawn down.
To the extent there is no evidence that it is
probable that some or all of the facility will
be drawn down, the fee is capitalised as
a prepayment and amortised over the period
of the facility to which it relates.
(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 is commercial negotiation and, if
not successful, legal proceedings are initiated,
as appropriate.
Potential 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
The grants received primarily arise from rail
projects delivered under the Infrastructure
Investment Programme, including the Inland
Rail Project, to improve efficiency and safety
of the National Land Transport Network.
Previously the Company has been awarded
other grants from the Government of Victoria
and other state funded projects. Grants from
the government are recognised at their fair
NOTE 21 (CONTINUED)
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
101