FINANCIAL STATEMENTS 60 Significant accounting estimates and assumptions Impairment of goodwill and intangibles with indefinite useful lives The Group determines whether goodwill and intangibles with indefinite useful lives are impaired at least on an annual basis. This requires an estimation of the recoverable amount in cash-generating units, using a value in use discounted cash flow methodology, to which the goodwill and intangibles with indefinite useful lives are allocated. Useful lives of property, plant and equipment The Group reviews the estimated useful lives, residual values and depreciation methods of property, plant and equipment at the end of each reporting period. Employee provisions The company carries provisions for a number of employee entitlements including for bonus, redundancy and project incentives. These provisions are recognised and measured at the reporting date based on all available information in existence at that time, and while requiring management judgement of future outcomes, represent the best estimate of the amount required to settle the obligations. These obligations are both legal and constructive in nature. Movements in these provisions caused by revision to the estimate of fair value are recognised in the statement of profit and loss. New accounting standards and interpretations New Accounting Standards and Interpretations effective from 1 July 2020 and are applicable for the Group: AASB 2018-6 (Amendments to AASs Definition of a Business) - Effective date 1 January 2020) Provides clarity on the definition of business and reduces the element of judgement when determining what a business is. The Group has assessed that the following amendment to the standards do not have an impact on the Group currently, it will be reconsidered in future as and when it does become applicable. AASB 2018-7 (Amendments to AASs – Definition of Material) – Effective date 1 January 2020 Definition of materiality has been amended and it should be easier to understand and apply. The Group has assessed that the following amendment to the standards do not have an impact on the Group currently, it will be reconsidered in future as and when it does become applicable. AASB 2019-3 Amendments to Australian Accounting Standards (AASs) – Interest Rate Benchmark reform – Effective date 01 Jan 2020 In May 2019, the IASB issued amendments to AASB 9, IAS 39 and AASB 7 to address uncertainties related to the ongoing reform of interbank offered rates (IBOR). The amendments provide targeted relief for financial instruments qualifying for hedge accounting in the lead up to IBOR reform. The Board completed its redeliberation process in August 2019. The Board has now published its first-phase amendments. The Group does not have any hedges affected by IBOR reform. The amendments are not expected to have any impact on the Group’s consolidated financial statements. AASB 4 Extension of the Temporary exemption from Applying AASB 9 (amendments) – Effective date 01 Jan 2020 Rather than having to implement AASB 9 in 2018, some companies are permitted to continue to apply IAS 39 Financial Instruments: Recognition and Measurement. To qualify, a reporting company’s activities need to be predominantly connected with insurance. The Group has determined that this amendment is not applicable as the Group does not have any insurance contracts. AASB 16 COVID-19-Related Rent Concessions (amendment) – Effective date 01 Jan 2020 In response to the COVID-19 coronavirus pandemic, the IASB issued amendments to AASB 16 Leases to allow lessees not to account for rent concessions as lease modifications if they are a direct consequence of COVID-19 and meet certain conditions. The practical expedient will only apply if: • the revised consideration is substantially the same or less than the original consideration; • the reduction in lease payments relates to payments due on or before 30 June 2021; and • no other substantive changes have been made to the terms of the lease. Lessees applying the practical expedient are required to disclose: • that fact, if they have applied the practical expedient to all eligible rent concessions and, if not, the nature of the contracts to which they have applied the practical expedient; and • the amount recognised in profit or loss for the reporting period arising from application of the practical expedient. The Group has adopted these amendments to contracts where lease concessions were provided as a direct consequence of COVID-19. The Group does not treat these concessions as lease modifications and has appropriately disclosed as such. Notes to the annual financial statements (continued) for the year ended 30 June 2021
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