Westgold Resources Limited Annual Report 2020

104 Westgold Resources Limited Annual Report 2020 Financial Report Notes to the Consolidated Financial Statements for the year ended 30 June 2020 40. ACCOUNTING STANDARDS (CONTINUED) (a) As permitted by AASB 16, the Group has elected not to recognise right-of-use assets and lease liabilities relating to short-term leases and leases of low-value assets. The lease commitments disclosed as at 30 June 2019 included amounts in relation to such leases, (b) An adjustment was required in order to take into account fixed outgoings associated with the rental of premises, which had not been included as at 30 June 2019, and (c) The lease liabilities recognised under AASB 16 are measured on a discounted basis, whereas the lease commitments disclosed as at 30 June 2019 were disclosed on an undiscounted basis. The discount rate used to discount the lease payments for each lease is the incremental borrowing rate appropriate for each lease at the date of initial application, i.e., the rate as at 1 July 2019. The discount rate used was the Group’s incremental borrowing rate at the initial date of application. The weighted average incremental borrowing rate at transition was 3.95% per annum. AASB 112 Income Taxes The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where it originally recognised those past transactions or events. An entity applies the amendments for annual reporting periods beginning on or after 1 July 2019, with early application permitted. When the entity first applies those amendments, it applies them to the income tax consequences of dividends recognised on or after the beginning of the earliest comparative period. Since the Group’s current practice is in line with these amendments, they had no impact on the consolidated financial statements of the Group. IFRIC 23 Uncertainty over Income Tax The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of AASB 112 Income Taxes . It does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following: – Whether an entity considers uncertain tax treatments separately, – The assumptions an entity makes about the examination of tax treatments by taxation authorities, – How an entity determines taxable profit (loss), tax bases, unused tax losses, unused tax credits and tax rates. The Group determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty. Upon adoption of the Interpretation, the Group has assessed whether the Interpretation had an impact on its consolidated financial statements and considered whether it has any uncertain tax positions. The Group determined, based on a review of its tax compliance that it is probable that its tax treatments (including those for its subsidiaries) will be accepted by the taxation authorities. Therefore, the Interpretation did not have an impact on the consolidated financial statements of the Group. AASB 123 Borrowing Costs The amendments clarify that an entity treats, as part of general borrowings, any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete. The entity applies the amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which it first applies those amendments. The entity applies those amendments for annual reporting periods beginning on or after 1 July 2019, with early application permitted. The amendment had no impact on the consolidated financial statements however may increase the capitalisation of borrowings going forward.