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2015 ANNUAL REPORT Speech Pathology Australia
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Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. After initial recognition, these are measured
at amortised cost using the effective interest method, less
provision for impairment. Discounting is omitted where the effect
of discounting is immaterial. The Company’s trade and most
other receivables fall into this category of financial instruments.
Individually significant receivables are considered for
impairment when they are past due or when other objective
evidence is received that a specific counterparty will default.
Receivables that are not considered to be individually impaired
are reviewed for impairment in groups, which are determined by
reference to the industry and region of a counterparty and other
shared credit risk characteristics. The impairment loss estimate
is then based on recent historical counterparty default rates for
each identified company.
HTM investments
HTM investments are non-derivative financial assets within
fixed or determinable payments and fixed maturity other than
loans and receivables. Investments are classified as HTM if the
company has the intention and ability to hold them until maturity.
HTM investments are measured subsequently at amortised cost
using the effective interest method. If there is objective evidence
that the investment is impaired, determined by reference to
external credit ratings, the financial asset is measured at the
present value of estimated future cash flows. Any changes to
the carrying amount of the investment, including impairment
losses, are recognised in profit or loss.
Classification and subsequent measurement of financial
liabilities.
The Company’s financial liabilities include borrowings and trade
and other payable.
Financial liabilities are measured subsequently at amortised
cost using the effective interest method, except for financial
liabilities held for trading or designated at FVTPL, that
are carried subsequently at fair value with gains or losses
recognised in profit or loss.
All interest-related charges and, if applicable, changes in an
instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
4.8 Income taxes
Non-member income of the Association is the only income
assessable for taxation, as member income is excluded under
the principle of mutuality.
The income tax expense (revenue) for the year comprises
current income tax expense (income).
Current income tax expense charged to profit or loss is the tax
payable on taxable income calculated using applicable income
tax rates enacted, or substantially enacted, as at the end of
the reporting date. Current tax liabilities (assets) are therefore
measured at the amounts expected to be paid to (recovered
from) the relevant taxation authority.
Current and deferred income tax expense (income) is charged
or credited directly to equity instead of the profit or loss when
the tax relates to items that are credited or charged directly to
equity.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the
respective asset and liability will occur. Deferred tax assets and
liabilities are offset where a legally enforceable right of set-off
exists, the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where it is intended
that net settlement or simultaneous realisation and settlement
of the respective asset and liability will occur in future periods in
which significant amounts of deferred tax assets and liabilities
are expected to be recovered or settled.
4.9 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and
demand deposits, together with other short-term, highly liquid
investments that are readily convertible into known amounts of
cash and which are subject to an insignificant risk of changes in
value.
4.10 Employee benefits
Short-term employee benefits
Short-term employee benefits are benefits, other than
termination benefits, that are expected to be settled wholly
within twelve (12) months after the end of the period in which
the employees render the related service. Examples of such
benefits include wages and salaries, non-monetary benefits
and accumulating sick leave. Short-term employee benefits are
measured at the undiscounted amounts expected to be paid
when the liabilities are settled.
Other long-term employee benefits
The Company’s liabilities for annual leave and long service
leave are included in other long term benefits as they are
not expected to be settled wholly within twelve (12) months
after the end of the period in which the employees render the
related service. They are measured at the present value of
the expected future payments to be made to employees. The
expected future payments incorporate anticipated future wage
and salary levels, experience of employee departures and
periods of service, and are discounted at rates determined by
reference to market yields at the end of the reporting period
on high quality corporate bonds (2014: government bonds)
that have maturity dates that approximate the timing of the
estimated future cash outflows. Any re-measurements arising
from experience adjustments and changes in assumptions are
recognised in profit or loss in the periods in which the changes
occur.
The Company presents employee benefit obligations as current
liabilities in the statement of financial position if the Company
does not have an unconditional right to defer settlement for at
least twelve (12) months after the reporting period, irrespective
of when the actual settlement is expected to take place.
4.11 Provisions, contingent liabilities and contingent assets
Provisions are measured at the estimated expenditure required
to settle the present obligation, based on the most reliable
evidence available at the reporting date, including the risks and
uncertainties associated with the present obligation. Where
there are a number of similar obligations, the likelihood that
an outflow will be required in settlement is determined by
considering the class of obligations as a whole. Provisions are
discounted to their present values, where the time value of
money is material.