S E C T I O N 1 2 : Our Financial Review
ALLIANCE ANNUAL REP ORT 2018
FOREIGN CURRENCY Transactions denominated in a foreign currency are converted at the exchange rates at the dates of the transactions. Foreign currency assets and liabilities (such as receivables and payables) are translated at the rate prevailing at balance date. The assets and liabilities of international subsidiaries are translated to New Zealand dollars at the closing rate at balance date. The revenue and expenses of these subsidiaries are translated at rates approximating the exchange rates at the dates of the transactions. Exchange differences arising on the translation of subsidiary financial statements are recorded in the foreign currency translation reserve (equity). Cumulative translation differences are recognised in the income statement in the period in which any international subsidiary is disposed of. The principal functional currency of international subsidiaries is UK dollars; the closing rate at balance date was 0.5058 (30 September 2017: 0.5379). A full list of international subsidiary functional currencies is in note E1 Subsidiaries. OTHER ACCOUNTING POLICIES Other accounting policies that are relevant to an understanding of the financial statements are provided throughout the notes to the financial statements. The accounting policies have been consistently applied to the periods in these financial statements. Where applicable comparatives have been amended to align with current yearâ€™s expenses. CRITIC AL JUD GEMENT S AND E STIMATE S The preparation of financial statements requires management to exercise its judgement in applying Allianceâ€™s accounting policies. Estimates and judgements are reviewed by management on an on-going basis, with revisions recognised in the period in which the estimate is revised and in any future periods affected. Areas of estimate or judgement that have most significant impact on the amounts recognised in the financial statements are:
- Note B2
-N ote D2
Derivative financial instruments.
R E - P R E S E N TAT I O N O F C E RTA I N P R I O R Y E A R C O M PA R AT I V E S To assist the users understanding of these financial statements, the following reclassifications and disclosure adjustments have been made:
- T he classification of interest bearing loans and borrowings between current and non-current have been reclassified. The result is a reclassification in 2017 figures of $9 million from non-current interest bearing loans and borrowings to current interest bearing loans and borrowings
- C ertain intangible assets have been reclassified from software to work in progress. The result is a reclassification of 2017 figures from nil to $2.8m
- A change in the basis which capital expenditure commitments is determined resulted in the 2017 figure of $31.7m being changed to $26.0m
These reclassification and adjustments have no impact on the financial performance of Alliance.
M J Taggart DIRECTOR
P M Schuyt DIRECTOR
22 November 2018