Home' Nufarm Annual Report : Nufarm Annual Report 2017 Contents 3. Significant accounting policies (continued)
(o) Income tax (continued)
(ii) Nature of tax funding arrangements and tax sharing agreements (continued)
The head entity, in conjunction with other members of the tax-consolidated group, has also entered a tax sharing agreement.
The tax sharing agreement provides for the determination of the allocation of the income tax liabilities between the entities
should the head entity default on its tax payment obligations. No amounts have been recognised in the consolidated financial
statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.
(p) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST or equivalent), except where
the GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the
cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable
to, the tax authority is included as a current asset or liability in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing
and financing activities which are recoverable from, or payable to, the relevant tax authorities are classified as operating cash flows.
(q) Earnings per share
The group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all potential dilutive ordinary shares, which
comprise convertible notes and share options granted to employees.
(r) Segment reporting
Determination and presentation of operating segments
An operating segment is a component of the group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the group’s other components. All
operating segment results are reviewed regularly by the group’s CEO to make decisions about resources to be allocated
to the segment and to assess its performance.
Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly loans and borrowings and related expenses, corporate
assets and head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and
intangible assets other than goodwill.
4. Determination of fair values
Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When
applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific
to that asset or liability.
(i) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on market values.
The market value of property is the estimated amount for which a property could be exchanged on the date of valuation
between a willing buyer and a willing seller in an arms’-length transaction after proper marketing wherein the parties had each
acted knowledgeably and willingly. The market value of items of plant, equipment, fixtures and fittings is based on the market
approach and cost approaches quoted market prices for similar items when available and replacement cost when appropriate.
(ii) Intangibles assets
The fair value of patents and trademarks acquired in a business combination is based on the discounted estimated royalty
payments that have been avoided as a result of the patent or trademark being owned. The fair value of other intangible
assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets.
NOTES TO THE FINANCIAL STATEMENTS continued
NUFARM LIMITED ANNUAL REPORT 2017
Links Archive Nufarm Half Year Report 2017 Nufarm Sustainability Report 2017 Navigation Previous Page Next Page