Notes to the Financial Statements
For the year ended 30 June 2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
New accounting standards and interpretations (continued)
AASB Interpretation 15 Agreements for the Construction of Real Estate clarifies whether AASB 118 Revenue or AASB 111 Construction Contracts should be applied to particular transactions. The Consolidated Entity has reviewed its current agreements for the sale of real estate in the light of new guidance and concluded that there will be no change to the accounting for these agreements if AASB-I 15 was adopted in the current financial year. Consequently, it does not expect to make any adjustment on the initial application of AASB-I 15 from 1 July 2009.
Other recently issued or amended standards are not expected to have a significant impact on the amounts recognised or disclosures made in these Financial Statements when restated for the application of these new or amended standards.
c) Basis of consolidation
The Consolidated Financial Statements comprise the Financial Statements of AVJennings Limited and its subsidiary companies as at 30 June 2009.
The acquisition of subsidiary companies is accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition.
d) Investments in subsidiary companies and controlled entities
Investments in controlled entities are accounted for in the Consolidated Financial Statements as set out in note 2(c). Investments in joint ventures are accounted for as set out in note 2(e) and investments in associates are accounted for as set out in note 2(f).
e) Interests in joint ventures
Jointly controlled assets
The proportionate interests in the assets, liabilities, revenues and expenses of a joint venture activity are incorporated under appropriate headings in the Consolidated Financial Statements. Details of proportionately consolidated joint ventures are set out in note 20.
Joint venture entities
Subsidiary companies are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a Group controls another entity.
The interest in a joint venture partnership is accounted for using the equity method of accounting and is carried at cost. Under the equity method, the Consolidated Entity’s share of the profits or losses of the partnership is recognised in the Income Statement, and the share of movements in reserves is recognised in the Balance Sheet. Details relating to the partnerships are set out in note 17(b).
The Financial Statements of the subsidiary companies are prepared for the same reporting period as the Parent Entity,
using consistent accounting policies.
In preparing the Consolidated Financial Statements, all
expenses, and profit and losses resulting from intra-group
f) Investments in associates
The Consolidated Entity’s investment in associates is accounted for using the equity method of accounting. Associates are entities over which the Consolidated Entity has significant influence and that are neither subsidiary companies nor joint ventures.
transactions have been eliminated in full.
Subsidiary companies are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date on which control is transferred out of the Group.
Under the equity method, investments in associates are carried in the Balance Sheet at cost plus post-acquisition changes in the Consolidated Entity’s share of net assets of an associate. After application of the equity method, the Consolidated Entity determines whether it is necessary to recognise any impairment loss with respect to it’s net investment in an associate.
Investments in subsidiary companies held by AVJennings Limited are accounted for at cost in the separate Financial Statements of the Parent Entity, less any impairment charges.
AVJennings Limited ABN 44 004 327 771 31