b'NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020AASB 117 Leases and for lessees eliminates the classifications of operatingare available.No deferred income tax will be recognised from the initial leases and finance leases. Except for short-term leases and leases of low- recognition of an asset or liability, excluding a business combination, where valueassets,right-of-useassetsandcorrespondingleaseliabilitiesarethere is no effect on accounting or taxable profit or loss.recognised in the statement of financial position. Straight-line operatingDeferred tax assets and liabilities are calculated at the tax rates that are lease expense recognition is replaced with a depreciation charge for theexpected to apply to the period when the asset is realised or the liability is right-of-use assets (included in operating costs) and an interest expensesettled, based on tax rates enacted or substantively enacted at the end of on the recognised lease liabilities (included in finance costs). For lessorthe reporting period.Their measurement also reflects the manner in which accounting,thestandarddoesnotsubstantiallychangehowalessormanagement expects to recover or settle the carrying amount of the related accounts for leases. asset or liability.The Club did not have any operating leases to which the Club was aDeferred tax assets relating to temporary differences and unused tax losses party as a lessee, and therefore no amounts have been recognised onare recognised only to the extent that it is probable that future taxable profit the statement of financial position as a result of the adoption of the newwill be available against which the benefits of the deferred tax asset can accounting standard. The Club is the landlord for the Jewellers retail outlet atbe utilised.the entrance to the Club and this new standard has had no financial impactCurrent tax assets and liabilities are offset where a legally enforceable with respect to that lease including no impact on the recognition of incomeright of set-off exists and it is intended that net settlement or simultaneous derived therefrom and no requirement to record any asset and liability withrealisation and settlement of the respective asset and liability will occur.respect to the retail lease. Deferred tax assets and liabilities are offset where a legally enforceable Impact of adoption right of set-off exists, the deferred tax assets and liabilities relate to income The adoption of new Accounting Standards and Interpretations did not havetaxes levied by the same taxation authority on either the same taxable any significant impact on the financial performance or position of the Companyentity or different taxable entities, where it is intended that net settlement or as at 30 June 2020 nor on opening retained profits as at 1 July 2019.simultaneous realisation and settlement of the respective asset and liability Going Concern will occur in future periods in which significant amounts of deferred tax The financial statements have been prepared on a going concern basis, whichassets or liabilities are expected to be recovered or settled.contemplates continuity of normal business activities and the realisation of(b) Inventoriesassets and settlements of liabilities in the ordinary course of business for aInventories are measured at the lower of cost and net realisable value. period of at least twelve months from the date these financial statements were(c) Property, Plant and Equipmentapproved. Each class of property, plant and equipment is carried at cost or fair value As at 30 June 2020, the Club incurred a net loss of $348,056 (2019: net incomeasindicatedless,whereapplicable,anyaccumulateddepreciationand of $51,074) and an operating cash inflow of $204,135 (2019: cash inflow ofimpairment losses.$336,278). Land and BuildingsThe Club also notes the unpredictability of the COVID-19 situation, and theFreehold land and buildings are shown at their fair value (being the amount potential impact on the going concern basis of preparation. On 22 March 2020,for which an asset could be exchanged between knowledgeable willing the Government announced forced closure of registered and licensed clubs,parties in an arms length transaction), based on periodic valuations by licensed premises in hotels and pubs, entertainment venues and cinemas,external independent valuers, less subsequent depreciation for buildings.casinos and nightclubs effective from Midday 23 March 2020 until furtherIncreases in the carrying amount arising on revaluation of land and buildings notice.Assuch,theClubwasclosedforallfood,beverageandfunctionarecreditedtoarevaluationsurplusinothercomprehensiveincome. activities from this date. On 1 June 2020, the Club reopened on legislated socialDecreases that offset previous increases of the same asset are charged distancing requirements. This closure has had a significant impact on the Clubsagainst revaluation surpluses directly in other comprehensive income; all operating cash flows and financial position for the period prior to year-end.other decreases are charged to the profit and loss account.At the date of this report, the Club has been trading for approximately fourAnyaccumulateddepreciationatthedateofrevaluationiseliminated months, however the financial position has yet to significantly recover. Dueagainst the gross carrying amount of the asset and the net amount is to the uncertainty around the ongoing impacts of COVID and any potentialrestated to the revalued amount of the asset.future increases in restrictions, there is a degree of uncertainty associatedPlant and Equipmentwith forecasting cash flows over the following 12 month period. Therefore, existing cash flow forecasts are based on minimal cash inflows and knownPlant and equipment are measured on the cost basis less accumulated cash outflows to enable the Board to determine the maximum monthly cashdepreciation and impairment losses.flow loss. Thecarryingamountofplantandequipmentisreviewedannuallyby The directors believe there are reasonable grounds to conclude the companydirectors to ensure it is not in excess of the recoverable amount from these will continue as a going concern on the basis of the following:assets. The recoverable amount is assessed on the basis of the expected The Club maintains significant balances of term deposit cash and liquidnetcashflowsthatwillbereceivedfromtheassetsemploymentand equity investments on which to draw, to fund expected shortfalls in cashsubsequent disposal. The expected net cash flows have been discounted to flow for a period of over 24 months from signing of the financial report; and their present values in determining recoverable amounts.The Club holds no external debt, and as such is not subject to servicing anyRepairs and maintenance are charged to the profit and loss account during significant external liabilities.the financial period in which they are incurred.Accounting Policies Depreciation(a) Income Tax The depreciable amount of all fixed assets including buildings and capitalised The Club pays tax on income derived other than from members. The incomelease assets, but excluding freehold land, is depreciated on a straight-line tax expense/(revenue) for the year comprises current income tax expense/ basis over the assets useful life to the Club commencing from the time the (income) and deferred tax expense/(income).asset is held ready for use.Depreciation is recognised in the profit and loss Current income tax expense charged to the profit or loss is the tax payableaccount.on taxable income calculated using applicable income tax rates enacted,The depreciation rates used for each class of depreciable assets are:or substantially enacted, as at the end of the reporting period.Current tax ClassofFixedAsset DepreciationRateliabilities/(assets) are therefore measured at the amounts expected to beBuildings1.0% - 2.5%paid to/(recovered from) the relevant taxation authority. Plant & Equipment10.0%33.3%Deferred income tax expense reflects movements in deferred tax asset andThe assets residual values and useful lives are reviewed, and adjusted if deferred tax liability balances during the year as well as unused tax losses.appropriate, at the end of each reporting period.Current and deferred income tax expense/(income) is charged or creditedAn assets carrying amount is written down immediately to its recoverable outside the profit and loss when the tax relates to items that are recognisedamountiftheassetscarryingamountisgreaterthanitsestimated outside the profit and loss. recoverable amount.DeferredtaxassetsandliabilitiesareascertainedbasedontemporaryGainsandlossesondisposalsaredeterminedbycomparingproceeds differences arising between the tax bases of assets and liabilities and theirwith the carrying amount. These gains and losses are included in the profit carryingamountsinthefinancialstatements.Deferredtaxassetsalsoand loss account. When revalued assets are sold, amounts included in the result where amounts have been fully expensed but future tax deductionsrevaluation surplus relating to that asset are transferred to retained earnings.October 2020 NSW Masonic Club13'