 The Standard defines significant influence and provides guidance on how the equity method of accounting is to be applied. It also prescribes how investments in associates and joint ventures should be tested for impairment. 

 AASB 128 will be mandatory for the consolidated entity’s 30 June 2014 financial statements. The potential impact on the consolidated entity’s financial statements has not yet been determined. 

> AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards is effective for annual reporting periods beginning on or after 1 January 2013. 

 AASB 2011-7 gives effect to many consequential amendments to a number of Standards and Interpretations arising from the issuance of the new consolidation and joint arrangements Standards. 

 The amendments, which will be mandatory for the consolidated entity’s 30 June 2014 financial statements, are not expected to have any significant impact on the financial statements. 

> AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income  is effective for annual reporting periods beginning on or after 1 July 2012. 

 These amendments arise from the issuance of the IASB Standard Presentation of Items of Other Comprehensive Income (Amendments to IAS 1)  in June 2011. 

 The amendments require entities to present separately the items of other comprehensive income that would be reclassified to profit or loss in the future if specific conditions are met from those that would never be reclassified to profit or loss. Tax on items in other comprehensive income is also required to be allocated on the same basis. 

 The amendments will be mandatory for the consolidated entity’s 30 June 2013 financial statements. The potential impact on the consolidated entity’s financial statements has not yet been determined. 

 In addition to the above recently issued Standards, the following new and amendments to Standards are also applicable in future years. It is not expected these Standards will materially impact the consolidated entity’s financial statements upon adoption. 

> AASB 1053 Application of Tiers of Australian Accounting Standards  and AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements 

> AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets 

> AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements 

> AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities 

> AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities 

> AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle 

## Note 2 – Significant accounting judgements, estimates and assumptions 

Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods. 

## Impairment of goodwill and other intangibles with indefinite useful lives 

The consolidated entity determines whether goodwill and other intangibles with indefinite useful lives are impaired at least on an annual basis. This requires an estimation of the value in use of the recoverable amount of the cash-generating units, using a value in use discounted methodology, to which the goodwill and intangibles with indefinite useful lives are allocated. The assumptions used in the estimation of recoverable amount are discussed in Note 22. 

## Business combinations 

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. This method requires the application of fair values for both the consideration given and the assets and liabilities acquired. The calculation of fair values is often based on estimates and judgements including future cash flows, revenue streams and value in use calculations. 

## Allowance for doubtful debts 

The collectability of trade receivables is reviewed on an ongoing basis. An allowance for doubtful debts is established when there is objective evidence that the consolidated entity will not be able to collect all amounts due. Management uses its judgement in determining the level of doubtful debt provisioning, taking into account the historic analysis of bad debt trends and the prevailing economic conditions. Refer to Note 13 for further details. 

## 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 13. 

## 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 financial 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 53 for further details. 

