b'NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2022 Financial assets (continued)cash flows are discounted using market yields on corporate bonds with Impairment of financial assets terms to maturity that match the expected timing of cash flows.Impairment of financial assets is recognised on an expected credit loss (ECL)(g) Provisionsbasis for the following assets: ProvisionsarerecognisedwhentheClubhasalegalorconstructive financial assets measured at amortised cost obligation, as a result of past events, for which it is probable that an outflow Under AASB 9 Financial Instruments, an expected credit loss model is appliedof economic benefits will result and that outflow can be reliably measured.in measuring impairment losses on financial assets. To reflect changes inProvisions are measured using the best estimate of the amounts required to credit risk this expected credit loss model requires the Club to account forsettle the obligation at reporting date.expected credit losses since initial recognition. If the credit risk on a financial(h) Cash and Cash Equivalentsinstrument has not shown significant change since initial recognition, anCash and cash equivalents include cash on hand, deposits held at call with expected credit loss amount equal to the 12-month expected credit loss isbanks, other short- term highly liquid investments with original maturities of used. However, a loss allowance is recognised at an amount equal to thethree months or less, and bank overdrafts. Bank overdrafts are shown within lifetime expected credit loss if the credit risk on that financial instrument hasshort-term borrowings in current liabilities on the statement of financial position.increased significantly since initial recognition. (i) Revenue RecognitionWhen determining whether the credit risk of a financial asset has increasedRevenue from contracts with customers significantsinceinitialrecognitionandwhenestimatingECL,TheClubThe core principle of AASB 15 is that revenue is recognised on a basis considersreasonableandsupportableinformationthatisrelevantandthat reflects the transfer of promised goods or services to customers at available. This includes both quantitative and qualitative information andan amount that reflects the consideration the Club expects to receive in analysisbasedontheClubshistoricalexperienceandinformedcreditexchange for those goods or services. Revenue is recognised by applying a assessment and including forward looking information. five-step model as follows:The Club uses the presumption that an asset which is more than 90 days1. Identify the contract with the customer;past due has seen a significant increase in credit risk. 2. Identify the performance obligations;The Club uses the presumption that a financial asset is in default when: 3. Determine the transaction price;the other party is unlikely to pay its credit obligations to the Club in full,4. Allocate the transaction price to the performance obligations; andwithout recourse to the Club to actions such as realising security (if any5. Recognise revenue as the performance obligations are satisfied. is held); orthe financial asset is more than 90 days past due. Accommodation revenueCredit losses are measured as the present value of the difference betweenAccommodation revenue is recognised at the point in time services are the cash flows due to the Club in accordance with the contract and the cashprovided to the guest.flows expected to be received. This is applied using a probability weightedRoom hire revenueapproach. On derecognition of a financial asset measured at amortisedOther room hire is recognised at the time service is provided to the hirer.cost, the difference between the assets carrying amount and the sum of theFood and beverage salesconsideration received and receivable is recognised in profit or loss.Food and beverage sales are recognised at the time the goods are delivered Trade receivables (and contract assets) to the customer, being the point of sale. Income received in advance of the Impairment of trade receivables and contract assets have been determineddate of food and beverage consumption is deferred.usingthesimplifiedapproachinAASB9whichusesanestimationofMembership subscription revenuelifetime expected credit losses. The Club has determined the probability ofMembership income is recognised over time, through the period to which non-payment of the receivable and contract asset and multiplied this by thethemembershiprenewalrelates.Anymembershipsubscriptionrevenue amount of the expected loss arising from default. relating to periods beyond the current financial year is carried forward in the The amount of the impairment is recorded in a separate allowance accountStatement of Financial Position as income received in advance.with the loss being recognised in the statement of profit or loss. Once the receivable is determined to be uncollectable then the gross carrying amountLease incomeis written off against the associated allowance. Lease income from the tenanted shop is recognised on a straight line basis Other financial assets measured at amortised cost over the term of the lease.ImpairmentofotherfinancialassetsmeasuredatamortisedcostareInterest revenuedeterminedusingtheexpectedcreditlossmodelinAASB9.OninitialInterest revenue is recognised using the effective interest rate method.recognition of the asset, an estimate of the expected credit losses for theDividend incomenext 12 months is recognised. Where the asset has experienced significantDividend revenue is recognised when the right to receive a dividend has been increase in credit risk then the lifetime losses are estimated and recognised. established.Financial liabilities Government grantsJobkeeper and Jobsaver subsidiesThe Club measures all financial liabilities initially at fair value less transactionGovernment grants relating to costs are deferred and recognised in profit or costs, subsequently financial liabilities are measured at amortised cost usingloss over the period necessary to match them with the costs that they are the effective interest rate method. intended to compensate. Government grants have been presented on a gross The financial liabilities of the Club comprise trade and other payables. basis in the statement of profit or loss and other comprehensive income. (e) Impairment of Assets Compensation payments receivedAt the end of each reporting period, the Club assesses whether there is anyCompensationpaymentsarepaymentsreceivedfromthirdpartiesto indication that an asset has been impaired. If such an indication exists, ancompensate for works occurring on and around the Clubs premises. These impairment test is carried out on the asset by comparing the recoverablepayments are recognised as income when it is received or when the right to amount of the asset, being the higher of the assets fair value less costs to sellreceive payment is established.and value in use to the assets carrying value. Any excess of the assets carrying(j) Goods and Services Tax (GST)value over its recoverable amount is expensed to the profit and loss account. Revenues, expenses and assets are recognised net of the amount of GST, Where it is not possible to estimate the recoverable amount of an individualexceptwheretheamountofGSTincurredisnotrecoverablefromthe asset, the Club estimates the recoverable amount of the cash-generating unitAustralian Taxation Office. In these circumstances, the GST is recognised to which the asset belongs. as part of the cost of acquisition of the asset or as part of an item of the (f) Employee Benefits expense. Receivables and payables in the statement of financial position are Provision is made for the Clubs liability for employee benefits arising fromshown inclusive of GST.services rendered by employees to balance date. Employee benefits thatCash flows are presented in the statement of cash flows on a gross basis, are expected to be settled within one year have been measured at theexcept for the GST component of investing and financing activities, which are amounts expected to be paid when the liability is settled. Employee benefitsdisclosed as operating cash flows.payable later than one year have been measured at the present value of the(k) Comparative Figuresestimated future cash outflows to be made for those benefits. In determiningWhere required by Accounting Standards, comparative figures have been the liability, consideration is given to employee wage increases and theadjusted to conform to changes in presentation for the current financial year.probability that the employees may not satisfy vesting requirements. Those October 2022 NSW Masonic Club15'