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NOTES TO THE FINANCIAL STATEMENTS
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
24 February 2009.
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 Financial Year. However,
certain standards, amendments and interpretations that are on
issue but not yet 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 other
than disclosure changes on the results of the Company
or Spark Infrastructure.
• AASB 3 “Business Combinations” – effective for annual
reporting periods beginning on or after 1 July 2009.
As a consequence of the amendment to the above AASB,
stapling arrangements such as Spark Infrastructure will be
covered under the standard. AASB interpretation 1002 “Post-date
of Transition Stapling Arrangements” will be superseded.
As existing stapling arrangements will not be impacted, there are
no financial or disclosure implications for Spark Infrastructure.
The amendments introduce greater use of fair values and
greater volatility in the Income Statement due to changes in
the accounting treatment for transaction costs, contingent
consideration and share based payments. These changes apply
only to business combinations made by Spark Infrastructure
after 1 January 2010.
• AASB 123 “Borrowing Costs” (effective for annual reporting
periods beginning on or after 1 January 2009).
The principle change from the above standard is the
requirement to capitalise borrowing costs attributable to
acquisition, construction or production of a qualifying asset.
The current standard permits such costs to be either expensed
or capitalised.
Spark Infrastructure’s policy is to capitalise borrowing costs
and therefore adoption of the above standard will not impact
on reported results.
• AASB 8 “Operating Segments” – (effective for annual reporting
periods beginning on or after 1 January 2009).
This standard will require the entity to adopt a “management
approach” to disclosing information about its reportable
segments. Generally, the financial information will be reported
on the same basis as it is used internally by the chief decision
maker for evaluating operating segment performance and
deciding how to allocate resources to operating segments.
Such information may be prepared using different measures to
that used in preparing the income statement and balance sheet,
in which case reconciliation of certain items will be required.
AASB 8 is a disclosure standard and at this stage it is not
expected to impact the amounts included in the results of
the Company or Spark Infrastructure.
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.
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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