b'NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2023(a) Income Tax (continued) Gainsandlossesondisposalsaredeterminedbycomparingproceeds Deferredtaxassetsandliabilitiesareascertainedbasedontemporarywith the carrying amount. These gains and losses are included in the profit differences arising between the tax bases of assets and liabilities and theirand loss account. When revalued assets are sold, amounts included in the carryingamountsinthefinancialstatements.Deferredtaxassetsalsorevaluation surplus relating to that asset are transferred to retained earnings.result where amounts have been fully expensed but future tax deductions(d) Financial Instrumentsare available.No deferred income tax will be recognised from the initialFinancialinstrumentsarerecognisedinitiallyonthedatethattheClub recognition of an asset or liability, excluding a business combination, wherebecomes party to the contractual provisions of the instrument.there is no effect on accounting or taxable profit or loss. On initial recognition, all financial instruments are measured at fair value Deferred tax assets and liabilities are calculated at the tax rates that areplus transaction costs (except for instruments measured at fair value through expected to apply to the period when the asset is realised or the liability isprofit or loss where transaction costs are expensed as incurred).settled, based on tax rates enacted or substantively enacted at the end ofFinancial assetsthe reporting period.Their measurement also reflects the manner in whichAll recognised financial assets are subsequently measured in their entirety management expects to recover or settle the carrying amount of the relatedat either amortised cost or fair value, depending on the classification of the asset or liability. financial assets.Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profitClassificationwill be available against which the benefits of the deferred tax asset canOn initial recognition, the Club classifies its financial assets into the following be utilised. categories, those measured at:Current tax assets and liabilities are offset where a legally enforceableamortised costright of set-off exists and it is intended that net settlement or simultaneousfair value through profit or loss - FVTPLrealisation and settlement of the respective asset and liability will occur.fair value through other comprehensive income - equity instrument (FVOCI Deferred tax assets and liabilities are offset where a legally enforceable- equity)right of set-off exists, the deferred tax assets and liabilities relate to incomefair value through other comprehensive income - debt investments (FVOCI taxes levied by the same taxation authority on either the same taxable- debt)entity or different taxable entities, where it is intended that net settlement orFinancial assets are not reclassified subsequent to their initial recognition simultaneous realisation and settlement of the respective asset and liabilityunless the Club changes its business model for managing financial assets.will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. Amortised cost(b) Inventories Assets measured at amortised cost are financial assets where:Inventories are measured at the lower of cost and net realisable value. the business model is to hold assets to collect contractual cash flows; and(c) Property, Plant and Equipment the contractual terms give rise on specified dates to cash flows are solely Each class of property, plant and equipment is carried at cost or fair valuepayments of principal and interest on the principal amount outstanding.asindicatedless,whereapplicable,anyaccumulateddepreciationandThe Clubs financial assets measured at amortised cost comprise trade and impairment losses. other receivables and cash and cash equivalents in the statement of financial Land and Buildings position.Freehold land and buildings are shown at their fair value (being the amountSubsequent to initial recognition, these assets are carried at amortised cost for which an asset could be exchanged between knowledgeable willingusing the effective interest rate method less provision for impairment.parties in an arms length transaction), based on periodic valuations byInterest income and impairment are recognised in profit or loss. Gain or loss external independent valuers, less subsequent depreciation for buildings. on derecognition is recognised in profit or loss.Increases in the carrying amount arising on revaluation of land and buildingsFair value through other comprehensive incomearecreditedtoarevaluationsurplusinothercomprehensiveincome.TheClubsinvestmentsinequityinstrumentsnotheldfortradinghave Decreases that offset previous increases of the same asset are chargedbeen designated as fair value through other comprehensive income. The against revaluation surpluses directly in other comprehensive income; allmovement in fair value on equity instruments is accumulated in the financial other decreases are charged to the profit and loss account. assets reserve.AnyaccumulateddepreciationatthedateofrevaluationiseliminatedDividend revenue received on underlying equity instruments investment is against the gross carrying amount of the asset and the net amount isrecognised in profit or loss.restated to the revalued amount of the asset.Plant and Equipment Financial assets through profit or lossPlant and equipment are measured on the cost basis less accumulatedThe Club did not have any financial assets at fair value through profit or loss depreciation and impairment losses. during the financial year. ThecarryingamountofplantandequipmentisreviewedannuallybyImpairment of financial assetsdirectors to ensure it is not in excess of the recoverable amount from theseImpairment of financial assets is recognised on an expected credit loss (ECL) assets. The recoverable amount is assessed on the basis of the expectedbasis for the following assets:netcashflowsthatwillbereceivedfromtheassetsemploymentandfinancial assets measured at amortised costsubsequent disposal. The expected net cash flows have been discounted toUnder AASB 9 Financial Instruments, an expected credit loss model is applied their present values in determining recoverable amounts. in measuring impairment losses on financial assets. To reflect changes in Repairs and maintenance are charged to the profit and loss account duringcredit risk this expected credit loss model requires the Club to account for the financial period in which they are incurred. expected credit losses since initial recognition. If the credit risk on a financial Depreciation instrument has not shown significant change since initial recognition, an The depreciable amount of all fixed assets including buildings and capitalisedexpected credit loss amount equal to the 12-month expected credit loss is lease assets, but excluding freehold land, is depreciated on a straight-line basisused. However, a loss allowance is recognised at an amount equal to the over the assets useful life to the Club commencing from the time the asset islifetime expected credit loss if the credit risk on that financial instrument has held ready for use. Depreciation is recognised in the profit and loss account. increased significantly since initial recognition.The depreciation rates used for each class of depreciable assets are: When determining whether the credit risk of a financial asset has increased Class of Fixed AssetDepreciation Rate significantsinceinitialrecognitionandwhenestimatingECL,TheClub Buildings1.0% - 2.5% considersreasonableandsupportableinformationthatisrelevantand Plant & Equipment10.0%33.3% available. This includes both quantitative and qualitative information and analysisbasedontheClubshistoricalexperienceandinformedcredit The assets residual values and useful lives are reviewed, and adjusted ifassessment and including forward looking information.appropriate, at the end of each reporting period. The Club uses the presumption that an asset which is more than 90 days An assets carrying amount is written down immediately to its recoverablepast due has seen a significant increase in credit risk.amountiftheassetscarryingamountisgreaterthanitsestimated recoverable amount.14NSW Masonic Club October 2023'