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NOTES TO THE FINANCIAL STATEMENTS
Note 1. Summary of Accounting Policies
Basis of Preparation and Statement of Compliance
This financial report is a general purpose financial report prepared in
accordance with the Corporations Act 2001, accounting standards
and interpretations, and complies with other requirements of
the law.
This report includes separate financial statements of the Company
and the consolidated financial statements of Spark Infrastructure.
This financial report has been prepared on the basis of historical
cost, except for the revaluation of certain non-current assets and
financial instruments. Cost is based on the fair values of
consideration given in exchange for assets.
The Financial Statements comply with Australian equivalents to
International Financial Reporting Standards (“A-IFRS”). Compliance
with A-IFRS ensures that the Financial Statements and notes comply
with International Financial Reporting Standards (“IFRS”).
The financial report was authorised for issue by the Directors on
25 February 2008.
Standards Not Yet Effective
During the Financial Year, Spark Infrastructure adopted all the new
and revised standards and interpretations issued by the Australian
Accounting Standards Board (“AASB”) that are relevant to its
operations and effective for the current accounting period. However,
certain standards, amendments and interpretations that are on issue
but not effective have not been applied in the preparation of this
report. The following standards have not been applied in preparation
of this report:
•
AASB 101 “Presentation of Financial Statements” – revised
standard (effective for annual reporting periods beginning on or
after 1 January 2009).
The standard will result in a number of changes to the
presentation of the financial statements, including:
–
presenting all non-owner changes in equity ('comprehensive
income') either in one statement of comprehensive income
or in two statements (a separate income statement and a
statement of comprehensive income). Components of
comprehensive income may not be presented in the
statement of changes in equity;
–
presenting an additional statement of financial position
(balance sheet) as at the beginning of the earliest comparative
period when the entity applies an accounting policy
retrospectively, makes a retrospective restatement, or
reclassifies items in its financial statements (this would
generally mean that three balance sheets are presented in
these circumstances);
–
disclosing income tax relating to each component of other
comprehensive income; and
–
disclosing reclassification adjustments relating to components
of other comprehensive income.
The standard will not have any financial impact on the disclosed
results of Spark Infrastructure.
•
AASB 2007-4 “Amendments to Australian Accounting Standards
arising from ED 151 and Other Amendments” (effective for
annual reporting periods beginning on or after 1 July 2007).
The above amendments arise as a result of the AASB’s decision
that, in principle, all options that currently exist under IFRS should be
included in the A-IFRS and additionally Australian disclosures should
be eliminated, other than those considered particularly relevant to
the Australian reporting environment.
While the Standard increases the accounting policy options available
to organisations, these changes are not expected to significantly
impact Spark Infrastructure. The principal impact on the consolidated
entity, would relate to disclosures (eg the Standard allows cash flow
statement to be presented using the indirect method). This option
will be attractive to Spark Infrastructure as it would provide better
disclosure given the nature of income (e.g. interest income) that is
derived.
Significant Accounting Policies
The following significant accounting policies have been adopted in
the preparation and presentation of this report:
(a) Basis of Consolidation
Spark Infrastructure is a stapled structure where in one ordinary
share in SIH No. 1, one ordinary share in SIH No. 2, one CDI
representing one share in Spark International, one ordinary unit in
Spark Trust and one loan note issued by the responsible entity of
Spark Trust, have been stapled pursuant to a Stapling Agreement.
The Stapled Securities are listed and trade on the ASX, as if they
were a single security.
Spark Infrastructure is a business combination by contract alone and
thus, is prima facie, not a business combination for the purposes of
the application of Australian Accounting Standard AASB3
“Business Combinations”.
Principles of Consolidation
In preparing the consolidated Financial Statements for Spark
Infrastructure, SIH No. 1 has been identified as the parent entity on
the basis that it has issued the largest amount of ordinary equity. As
SIH No. 1 does not own any shares or units in other Stapled
Entities, the entire amount of the issued shares and units of those
entities has been reflected as a minority interest in the consolidated
balance sheet. The minority interests are attributable to the Stapled
Security Holders.
(b) Acquisition of Assets
The purchase method of accounting is used for all acquisitions of
assets. Cost is determined as the fair value of the assets given up,
equity issued or liabilities assumed at the date of acquisition plus
incidental costs directly attributable to the acquisition.
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