Qantas 2013 Annual Report Download - page 106

104
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2013
1. Statement of Signicant Accounting Policies
Qantas Airways Limited (Qantas) is a for-prot company limited by
shares, incorporated in Australia whose shares are publicly traded
on the Australian Securities Exchange (ASX) and which is subject to
the operation of the Qantas Sale Act as described in the Corporate
Governance Statement.
The Consolidated Financial Statements for the year ended
30June 2013 comprise Qantas and its controlled entities (together
referred to as the Qantas Group) and the Qantas Group’s interest
in associates and jointly controlled entities.
The Financial Statements of Qantas for the year ended
30June2013 were authorised for issue in accordance with
aresolution of the Directors on 6 September 2013.
A STATEMENT OF COMPLIANCE
The Consolidated Financial Statements are general purpose
nancial statements which have been prepared in accordance
with Australian Accounting Standards (AASBs) adopted by
the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The Consolidated Financial Statements also
comply with International Financial Reporting Standards (IFRSs)
and interpretations adopted by the International Accounting
Standards Board (IASB).
B BASIS OF PREPARATION
The Consolidated Financial Statements are presented in Australian
dollars, which is the functional currency of the Group, and have
been prepared on the basis of historical cost except in accordance
with relevant accounting policies where assets and liabilities
are stated at their fair values. Assets classied as held for sale
are stated at the lower of carrying amount and fair value less
coststosell.
Qantas is a company of the kind referred to in Australian Securities
and Investments Commission (ASIC) Class Order 98/100 dated
10 July 1998. In accordance with that Class Order, all nancial
information presented has been rounded to the nearest million
dollars, unless otherwise stated.
The accounting policies set out in Note 1 have been consistently
applied to all periods presented in the Consolidated Financial
Statements.
C CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Consolidated Financial Statements in
conformity with AASBs requires management to make judgements,
estimates and assumptions that affect the application of
accounting policies and reported amounts of assets, liabilities,
income and expenses. The estimates and associated assumptions
are based on historical experience and various other factors that
are believed to be reasonable under the circumstances, the results
of which form the basis for making the judgements about carrying
values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in any future periods
affected. Judgements made by management in the application of
AASBs that have a signicant effect on the Financial Statements
and estimates with a signicant risk of material adjustment in future
periods are highlighted below.
Change in Accounting Estimate – Passenger Revenue
During the year a review was undertaken of the key judgements
and estimates impacting the timing of revenue recognition and
the measurement of revenue received in advance for tickets which
have passed the ticketed travel date.
To more appropriately align the Group’s revenue recognition and
liability measurement estimates with ticket terms and conditions
and historic experience, revenue increased by $134million for the
year ended 30 June 2013 through a reduction in revenuereceived
in advance.
Tickets that have passed the ticketed travel date will be recognised
as revenue in accordance with these revised estimates based on
the ticketed terms and conditions and historic experience.
D PRINCIPLES OF CONSOLIDATION
Controlled Entities
Controlled entities are entities controlled by Qantas. Control exists
when Qantas has the power, directly or indirectly, to govern the
nancial and operating policies of an entity so as to obtain benets
from its activities. In assessing control, potential voting rights that
are presently exercisable or convertible are taken into account.
The Financial Statements of controlled entities are included in
the Consolidated Financial Statements from the date that control
commences until the date that control ceases.
Intra-group transactions, balances and unrealised gains and
losses on transactions between group companies are eliminated
in preparing the Consolidated Financial Statements.
Non-controlling interests in the results and equity of controlled
entities are shown separately in the Consolidated Income Statement,
Consolidated Statement of Comprehensive Income, Consolidated
Statement of Changes in Equity and Consolidated Balance Sheet.
Associates and Jointly Controlled Entities
Associates are those entities in which the Qantas Group has
signicant inuence, but not control or joint control, over the
nancial and operating policies.
Jointly controlled entities are those entities over whose activities the
Qantas Group has joint control, established by contractual agreement.
Investments in associates and jointly controlled entities are
accounted for using the equity accounting method. The
investments are carried at the lower of the equity accounted
amount and the recoverable amount.
The Qantas Group’s share of the associates’ and jointly controlled
entities’ post-acquisition prot or loss is recognised in the
Consolidated Income Statement from the date that signicant
inuence or joint control commences until the date that signicant
inuence or joint control ceases. The Qantas Group’s share of
post-acquisition movements in reserves is recognised in other
comprehensive income. The cumulative post-acquisition movements
are adjusted against the carrying value of the investment. Dividends
reduce the carrying amount of the equity accounted investment.
When the Qantas Group’s share of losses exceeds its equity
accounted carrying value of an associate or jointly controlled
entity, the Qantas Group’s carrying amount is reduced to nil
and recognition of further losses is discontinued, except to the
extent that the Qantas Group has incurred legal or constructive
obligations or made payments on behalf of an associate or
jointly controlled entity.