Territory Stories

Annual Report 2021–2022, Power and Water Corporation

Details:

Title

Annual Report 2021–2022, Power and Water Corporation

Other title

Tabled Paper 708

Collection

Tabled Papers for 14th Assembly 2020 -; Tabled Papers; ParliamentNT

Date

2022-11-23

Notes

Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.

Language

English

Subject

Tabled papers

Publisher name

Legislative Assembly of the Northern Territory

Place of publication

Darwin

File type

application/pdf

Use

Copyright

Copyright owner

Legislative Assembly of the Northern Territory

License

https://www.legislation.gov.au/Details/C2019C00042

Parent handle

https://hdl.handle.net/10070/893266

Citation address

https://hdl.handle.net/10070/893267

Page content

76 Financial Statements for the year ended 30 June 2022 Page 25 of 60 Power and Water Corporation Notes to the financial statements for the year ended 30 June 2022 2.3 Summary of significant accounting policies (cont'd) Deferred tax assets Deferred tax relating to items recognised outside profit or loss. CCuurrrreenntt aanndd ddeeffeerrrreedd ttaaxx ffoorr tthhee yyeeaarr (h) Cash and cash equivalents (i) Financial instruments FFiinnaanncciiaall aasssseettss Initial recognition and measurement Subsequent measurement Financial assets at amortised cost (debt instruments) Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments) Financial assets designated at fair value through OCI with no recycling of cumulative gains or losses upon derecognition (equity instruments) Financial assets at fair value through profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the reporting period. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The consolidated entity's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flow. The business model determines whether the cash flows will result from collecting contractual cash flows, selling the financial assets, or both. For purposes of subsequent measurement, financial assets are classified in four categories: Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. When the deductible temporary difference is associated with investments in controlled entities, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. Current and deferred tax is recognised as an expense or income in the profit or loss, except when it relates to items recognised in other comprehensive income, in which case current and deferred tax are also recognised in other comprehensive income. Income taxes relating to these items are recognised directly in other comprehensive income. Cash and cash equivalents comprise cash on hand and deposits held at call with financial institutions. Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income (OCI), or fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the consolidated entity's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the consolidated entity has applied the practical expedient, the consolidated entity initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the consolidated entity has applied the practical expedient are measured at the transaction price determined under AASB 15 Revenue from Contracts with Customers. Refer to the accounting policies in Note 2.3 (c): Revenue from Contracts with Customers.


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