## Unbilled revenue 

The consolidated entity recognises revenue from gas and electricity services once the gas and/or electricity has been consumed by the customer. Customers are billed on a periodic and regular basis. Management estimates customer consumption between the last invoice date and the end of the reporting period when determining gas and electricity revenue for the financial period. Various assumptions and financial models are used to determine the estimated unbilled consumption. The carrying amount of unbilled revenue is disclosed in Note 12. 

## Exploration and evaluation expenditure 

The consolidated entity’s policy for exploration and evaluation expenditure is stated in Note 1(p). The application of this policy requires management to make certain estimates and assumptions as to future events and circumstances, particularly in relation to the assessment of whether economic quantities of reserves have been found. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future exploitation or sale, then the relevant capitalised amount will be written off to the income statement. 

## Fair value of fi nancial instruments 

Management uses their judgement in selecting an appropriate valuation technique for financial instruments not quoted in an active market. Valuation techniques commonly used by market practitioners are applied. For derivative financial instruments, assumptions are made based on quoted market rates adjusted for specific features of the instrument. Other financial instruments are valued using a discounted cash flow analysis based on assumptions supported, where possible, by observable market prices and rates. Refer to Note 52 for further details. 

## Provision for environmental restoration 

The consolidated entity estimates the future removal and restoration costs of electricity generation assets, oil and gas production facilities, wells, pipelines and related assets at the time of installation of the assets. In most instances, removal of these assets will occur many years into the future. The calculation of this provision requires management to make assumptions regarding the removal date, application of environmental legislation, the extent of restoration activities required and available technologies. The carrying amount of the provision for environmental restoration is disclosed in Note 30. 

## Defi ned benefit superannuation plans 

Various actuarial assumptions are utilised in the determination of the consolidated entity’s defined benefit obligations. These assumptions and the related carrying amounts are discussed in Note 47. 

## Share-based payment transactions 

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using the Black-Scholes and Monte Carlo simulation methods, with the assumptions detailed in Note 48. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity. 

## Note 3 – Segment information 

## Operating segments 

The consolidated entity reports segment information on the same basis as the internal management reporting structure, which drives how the consolidated entity is organised and managed. 

The consolidated entity has identified its operating segments based on the internal reports that are regularly reviewed and used by the Board of Directors (the chief operating decision maker) in assessing performance and in determining the allocation of resources. 

Management has determined the operating segments based on the manner in which products are sold, whether retail or wholesale, and the nature of the services provided. The consolidated entity has four reportable operating segments as follows: 

– Retail Energy  is responsible for selling natural gas, electricity and energy-related products and services to residential, small business and commercial and industrial customers. 

– Merchant Energy  is responsible for developing, operating and maintaining power generation assets and managing the risks associated with the procurement and delivery of gas and electricity for its wholesale portfolio and for the Retail Energy segment. Merchant Energy also provides energy efficiency and carbon management services. 

– Upstream Gas  is responsible for exploration, development and production of coal seam gas, development and operation of gas storage facilities and also exploration and development of geothermal renewable energy sources. 

– Energy Investments  includes equity accounted investments in the ActewAGL Retail Partnership and Greater Energy Alliance Corporation Pty Limited. 

No operating segments have been aggregated to form the above reportable operating segments. 

In the segment financial results, the ‘Other’ category consists of the various Corporate activities which includes the head office and central support functions. Corporate is not considered a reportable operating segment. 

## Segment fi nancial results 

The measurement of segment results is in line with the basis of information presented to the Board of Directors for internal management reporting purposes. The performance of each segment is measured based on their ‘Operating EBIT contribution’ to the consolidated entity. Certain items of income and expense are excluded from the segment results to show a measure of underlying performance. These items include changes in fair value of financial instruments and significant items. 

Transfer prices between operating segments are on an arm’s-length basis in a manner similar to transactions with third parties. Inter-segment revenue is eliminated on consolidation. 

The accounting policies of the reportable segments are the same as the consolidated entity’s accounting policies. 

