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1.7 Revenue recognition
Revenue is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer, recovery of the consideration
is considered probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management
involvement with the goods, and the amount of revenue can be measured reliably.
Revenue from services rendered is recognised in the statement of profit or loss in proportion to the stage of completion of the transaction at
the statement of financial position date.
Finance income comprises interest receivable on funds invested. Finance income is recognised using the effective interest rate method.
Dividends are recognised when the right to receive payment is established.
1.8 Finance charges
Finance charges comprise interest payable on borrowings calculated using the effective interest rate method. The interest expense component
of finance lease payments is recognised in the statement of profit or loss using the effective interest rate method.
1.9 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that take a substantial period of time to prepare for
their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially complete.
Capitalisation is suspended during extended periods in which active development is interrupted. All other borrowing costs are expensed in the
period in which they are incurred.
1.10 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits held on call with banks net of bank overdrafts and investment in money market
instruments, all of which are available for use by the group unless otherwise stated.
1.11 Property, plant and equipment
Property, plant and equipment are reflected at cost to the group, less accumulated depreciation and accumulated impairment losses. Land
is stated at cost and is not depreciated. The present value of the estimated cost of dismantling and removing items and restoring the site in
which they are located is provided for as part of the cost of the asset. Depreciation is provided for on the straight-line basis over the estimated
useful lives of the property, plant and equipment to anticipated residual values. Estimate useful lives are:
Freehold land and buildings
Up to 50 years
Leasehold premises
Over the period of the lease
Plant and equipment
5 to 20 years
Office equipment, furniture and fittings
3 to 15 years
Vehicles
3 to 15 years
Capitalised leased assets
The same basis as owned assets or the lease period, whichever is the shorter
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to
the group.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
1.12 Leases
Leases that transfer substantially all the risks and rewards of ownership of the underlying asset to the group are classified as finance leases.
Assets acquired in terms of finance leases are capitalised at the lower of fair value and the present value of the minimum lease payments at
inception of the lease, and depreciated over the estimated useful life of the asset. The capital element of future obligations under the leases is
included as a liability in the statement of financial position. Lease payments are allocated using the effective interest rate method to determine the
lease finance cost, which is charged against income over the lease period, and the capital repayment, which reduces the liability to the lessor.
Leases where the lessor retains the risks and rewards of ownership of the underlying asset are classified as operating leases. Operating leases,
which have a fixed determinable escalation, are charged against income on a straight-line basis. Leases with contingent escalations are
expensed as and when incurred.
Notes to the consolidated financial statements
for the year ended June 30
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| Bidcorp Limited Annual integrated report 2016