Effect of A-IFRS on the cash fl ow statement for the fi nancial year ended 30 June 2005
There are no material differences between the cash fl ow statement presented under A-IFRS and the cash fl ow statement presented under the superseded policies.
Notes to the reconciliations of income and equity
(a) Cumulative exchange differences
At the date of transition, the consolidated entity elected to reset the foreign currency translation reserve to zero. An amount of $53,922 was reclassifi ed from the foreign currency translation reserve to retained earnings. These translation differences will be excluded from the calculation of any gain or loss on a subsequent disposal of the foreign operation.
For the year ended 30th June 2005, as the group’s foreign operations had always been translated through the foreign currency translation reserve, the adjustment required under A-IFRS is the $53,922 opening adjustment.
(b) Impairment of assets
The Group has reviewed all assets for impairment on transition and at 30 June 2005 in accordance with AASB 136 and has determined that a further impairment adjustment within the parent entity on transition was required
On transition, an additional impairment charge of $4,864,900 was booked to retained earnings within the parent company and for the year ended 30th June 2005, $333,910 was reversed against the loss for the year. There was no effect on the consolidated entity.
(c) Share based payments
For the fi nancial year ended 30 June 2005, share-based payments of $41,371 which were not recognised under the superseded policies were recognised under A-IFRS, with a corresponding increase in the employee equity-settled benefi ts reserve.
These adjustments had no material tax or deferred tax consequences.
(d) Income tax
Under superseded policies, the consolidated entity adopted tax-effect accounting principles whereby income tax expense was calculated on pre-tax accounting profi ts after adjustment for permanent differences. The tax-effect of timing differences, which occur when items were included or allowed for income tax purposes in a period different to that for accounting were recognised at current taxation rates as deferred tax assets and deferred tax liabilities, as applicable
Under A-IFRS, deferred tax is determined using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the fi nancial statements and their corresponding tax bases.
The effect of the above adjustments on the deferred tax balances are as follows:
The effect on consolidated profi t for the financial year ended 30 June 2005 was to increase previously reported income tax expense by $351,611 (company: nil).
(e) Retained earnings
The effect of the above adjustments on retained earnings is as follows:
