80 / 170
Notes to the consolidated financial statements
for the year ended June 30
1.24 Provisions
Provisions are recognised when the group has a legal or constructive obligation as a result of past events, for which it is probable that an
outflow of economic benefits will occur, and where a reliable estimate can be made of the amount of the obligation. Where the effect of
discounting is material, provisions are discounted. The discount rate used is a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
A provision for restructuring is recognised when the group has approved a detailed and formal restructuring plan and the restructuring has
either commenced or has been announced publicly. Future operating costs are not provided for.
A provision for dismantling and site restoration is calculated as the present value of the estimated cost of dismantling and removing items and
restoring the site in which they are located when the legal or constructive obligation arises or when the damage to the site occurs.
A provision for onerous contracts is recognised when the expected benefits to be derived by the group from a contract are lower than the
unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected
cost of terminating the contract and the expected net costs of continuing the contract. Before a provision is established, the group recognises
any impairment loss on the assets associated with that contract.
Customer loyalty points are accounted for at fair value of the consideration received or receivable in respect of the initial sale, and are allocated
between the loyalty points and the other components of the sale. The consideration allocated to the customer loyalty points is measured by
reference to their fair value, which is the amount for which the loyalty points could be sold at, multiplied by the probability of their redemption.
This amount is recognised as a provision until such time as the customer loyalty points are redeemed. Once the loyalty points are redeemed,
the amount will be recognised as revenue.
1.25 Stated capital and treasury shares
No par value ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new no par value ordinary shares
are deducted against the stated capital account.
Shares in the company, held by its subsidiary, are classified as the group’s shareholders’ interest as treasury shares. These shares are treated
as a deduction from the issued and weighted average number of shares. The cost price of the treasury shares is presented as a deduction
from total equity. Distributions received on treasury shares are eliminated on consolidation.
1.26 Vendors for acquisition
Vendors for acquisition are recognised when the group or company becomes party to acquisition contractual arrangements in the form of
earn-out targets. They are measured at fair value through profit or loss, with the resultant gain or loss being recognised in the statement
of profit or loss. The gain or loss in the statement of profit or loss excludes interest.
1.27 Segmental reporting
The reportable segments of the group have been identified based on the geographies of the businesses. This basis is representative of the
internal structure for management purposes.
“Segmental operating profit” includes revenue and expenses directly relating to a business segment but excludes net finance charges and
taxation, which cannot be allocated to any specific segment.
“Segmental trading profit” is defined as operating profit excluding items of a capital nature and is the basis on which management’s
performance is assessed. Share-based payment costs are also excluded from the result as this is not a criteria used in the management of the
reportable segments.
Segment operating assets and liabilities include property, plant and equipment, investments, inventories, trade and other receivables, trade and
other payables, and post-retirement obligations but excludes cash, borrowings, current taxation, and deferred taxation.
Certain segments were reclassified during the year. The comparative year’s segmental information has been represented to reflect these
insignificant changes.
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| Bidcorp Limited Annual integrated report 2016