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Fair value estimation
The fair value of financial instruments traded in active
markets (such as trading and available-for-sale securi-
ties) is based on quoted market prices at the end of
the reporting period. The quoted market price used for
financial assets held by the group is the current bid price.
The fair value of financial instruments that are not traded
in an active market (for example, over the counter de-
rivatives) is determined by using valuation techniques.
The group uses a variety of methods and makes as-
sumptions that are based on market conditions exist-
ing at the end of each reporting period. Quoted market
prices or dealer quotes for similar instruments are used
for long-term debt. Other techniques, such as estimated
discounted cash flows, are used to determine fair value
for the remaining financial instruments.
The carrying value less impairment provision of trade
receivables and payables are assumed to approximate
their fair values. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the fu-
ture contractual cash flows at the current market inter-
est rate that is available to the group for similar financial
instruments.
Impairment testing
The recoverable amounts of cash-generating units and
individual assets have been determined based on the
higher of value-in-use calculations and fair values less
costs to sell. These calculations require the use of esti-
mates and assumptions. It is reasonably possible that the
key assumptions may change whichmay then impact our
estimations and may then require a material adjustment
to the carrying value of goodwill and tangible assets.
Taxation
Judgement is required in determining the provision for
income taxes due to the complexity of legislation. There
are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordi-
nary course of business. The group recognises liabilities
for anticipated tax audit issues based on estimates of
whether additional taxes will be due. Where the final tax
outcome of these matters is different from the amounts
that were initially recorded, such differences will impact
the income tax and deferred tax provisions in the period
in which such determination is made.
The group recognises the net future tax benefit related
to deferred income tax assets to the extent that it is
probable that the deductible temporary differences will
reverse in the foreseeable future. Assessing the recover-
ability of deferred income tax assets requires the group
to make significant estimates related to expectations of
future taxable income. Estimates of future taxable in-
come are based on forecast cash flows from operations
and the application of existing tax laws in each jurisdic-
tion. To the extent that future cash flows and taxable
income differ significantly from estimates, the ability of
the group to realise the net deferred tax assets recorded
at the end of the reporting period could be impacted.
1.3 Property, plant and equipment
The cost of an item of property, plant and equipment is
recognised as an asset when:
•
it is probable that future economic benefits associ-
ated with the item will flow to the company; and
•
the cost of the item can be measured reliably.
Property, plant and equipment is initially measured at
cost.
Costs include costs incurred initially to acquire or con-
struct an item of property, plant and equipment and
costs incurred subsequently to add to, replace part of, or
service it.If areplacement cost is recognisedinthecarrying
amount of an item of property, plant and equipment, the
carrying amount of the replaced part is derecognised.
Property, plant and equipment are depreciated on the
straight line basis over their expected useful lives to their
estimated residual value.