NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2014 1 CORPORATE INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (c) Summary of significant accounting policies (i) Basis of consolidation (a) Basis of preparation The financial report of Village Roadshow Limited (“the Company” or “VRL”)  for the year ended 30 June 2014 was authorised for issue on 19 September  2014, in accordance with a resolution of the Directors. VRL is a for-profit  entity incorporated in Australia and limited by shares, which are publicly  traded on the Australian Securities Exchange. The principal activities of the  Company and its subsidiaries are described in Note 1(c)(xxix). – The impacts of all other standards and amendments to accounting  standards that have been issued by the AASB but are not yet  effective for the period ending 30 June 2014, have been determined  as having no significant impact on the financial results of the Group. The consolidated financial statements comprise the financial statements of  Village Roadshow Limited and its subsidiaries (“the Group”, “VRL group” or  “consolidated entity”) as at 30 June each year. The financial statements of  the subsidiaries are prepared for the same reporting period as the parent  company, using consistent accounting policies. The financial report is a general-purpose financial report, which has been  prepared in accordance with the requirements of the  Corporations Act 2001 ,  Australian Accounting Standards and other mandatory professional  reporting requirements. The financial report has also been prepared on a  historical cost basis, except for derivatives and any available for sale  investments that are measured at fair value. The financial report is presented in Australian dollars and all values are  rounded to the nearest thousand dollars ($’000), unless stated otherwise,  under the option available to the Company under ASIC Class Order 98/100.  The Company is an entity to which the class order applies. In preparing the consolidated financial report, all inter-company balances  and transactions, income and expenses and profits and losses resulting  from intra-group transactions have been eliminated in full. Subsidiaries  are fully consolidated from the date on which control is transferred to the  Group and cease to be consolidated from the date on which control is  transferred out of the Group. The presentation and classification of comparative items in the financial  report have been adjusted where appropriate to ensure that the disclosures  are consistent with the current period. Business combinations are accounted for using the acquisition method.  The consideration transferred in a business combination is measured at  fair value, which is calculated as the sum of the acquisition-date fair values  of the assets transferred by the acquirer, the liabilities incurred by the  acquirer to former owners of the acquiree and the equity issued by the  acquirer, and the amount of any non-controlling interest in the acquiree.  For each business combination, the acquirer measures the non-controlling  interest in the acquiree either at fair value or at the proportionate share of  the acquiree’s identifiable net assets. Acquisition-related costs are  expensed as incurred. When the Group acquires a business, it assesses the financial assets and  liabilities assumed for appropriate classification and designation in  accordance with the contractual terms, economic conditions, the Group’s  operating or accounting policies and other pertinent conditions as at the  acquisition date. This includes the separation of embedded derivatives in  host contracts by the acquiree. (ii) Business combinations (b) Statement of compliance and new accounting standards  and interpretations (i) The financial report complies with Australian Accounting Standards  and International Financial Reporting Standards (“IFRS”). (ii) The Group has adopted the following new and amended Australian  Accounting Standards and AASB Interpretations in the current  financial year: – AASB 10:  Consolidated Financial Statements . – AASB 11:  Joint Arrangements . – AASB 12:  Disclosure of Interests in Other Entities . – AASB 13:  Fair Value Measurement . – AASB 119:  Employee Benefits . – AASB 2012-2:  Amendments to Australian Accounting Standards  – Disclosures – Offsetting Financial Assets and Finanical Liabilities – AASB 2011-4:  Amendments to Australian Accounting Standards to  Remove Individual Key Management Personnel Disclosure  Requirements – AASB 2012-9:  Amendment to AASB 1048 arising from the withdrawal  of Australian Interpretation 1039 (iii) A number of standards and interpretations have been issued by the  Australian Accounting Standards Board (“AASB”) or the International  Accounting Standards Board (“IASB”) prior to 30 June 2014, which are  effective from a future date. Further details are as follows: – AASB 9:  Financial Instruments:  AASB 9 includes requirements for the  classification and measurement of financial assets resulting from  the first part of Phase 1 of the project by the International Accounting  Standards Board (“IASB”) to replace IAS 39: Financial Instruments:  Recognition and Measurement (AASB 139: Financial Instruments:  Recognition and Measurement). Application date of this standard is  1 January 2018, and application date for the Group is 1 July 2018. The  impact of adoption of this standard on the Group’s financial results  has not yet been assessed. – AASB 1031:  Materiality:  The revised AASB 1031 is an interim  standard that cross-references to other Standards and the  Framework (issued December 2013) that contain guidance on  materiality. AASB 1031 will be withdrawn when references to AASB  1031 in all Standards and Interpretations have been removed.  Application date of this standard is 1 January 2014, and application  date for the Group is 1 July 2014. This standard has no financial  impact on the Group as it relates to disclosures only. – IFRS 15:  Revenue from Contracts with Customers:  The core principle  of IFRS 15 is that an entity recognises revenue to depict the transfer  of promised goods or services to customers in an amount that  reflects the consideration to which the entity expects to be entitled  in exchange for those goods or services. Application date of this  standard is 1 January 2017, and application date for the Group is  1 July 2017. The impact of adoption of this standard on the Group’s  financial results has not yet been assessed. If the business combination is achieved in stages, the acquisition date fair  value of the acquirer’s previously held equity interest in the acquiree is  remeasured at fair value as at the acquisition date through profit or loss. Any contingent consideration to be transferred by the acquirer will be  recognised at fair value at the acquisition date. Subsequent changes to the  fair value of the contingent consideration which is deemed to be an asset or  liability will be recognised in accordance with AASB 139:  Financial  Instruments: Recognition and Measurement  either in profit or loss or in other  comprehensive income. If the contingent consideration is classified as  equity, it shall not be remeasured. The Group has early adopted AASB 2013-3:  Amendments to AASB 136  – Recoverable Amount Disclosures for Non-Financial Assets . Adoption of these amended Accounting Standards did not have any impact  on the financial position or performance of the Group. Revenue is recognised to the extent that it is probable that the economic  benefits will flow to the Group and the revenue can be reliably measured.  The following specific recognition criteria must also be met before revenue  is recognised: Revenue is recognised when the significant risks and rewards of ownership  of the goods have passed to the buyer and the costs incurred or to be  incurred in respect of the transaction can be measured reliably. Risks and  rewards of ownership are considered passed to the buyer at the time of  delivery of the goods to the customer. Revenue from the rendering of services is recognised when control of a  right to be compensated for the services has been attained by reference to  the stage of completion. Where contracts span more than one reporting  period, the stage of completion is based on an assessment of the value of  work performed at that date. Revenue is recognised as interest accrues using the effective interest rate  method. This is a method of calculating the amortised cost of a financial  asset and allocating the interest income over the relevant period using the  effective interest rate, which is the rate that exactly discounts estimated  future cash receipts through the expected life of the financial asset to the  net carrying amount of the financial asset. (iii) Revenue recognition (a) Sale of goods (b) Rendering of services (c) Interest income 38 VILLAGE ROADSHOW LIMITED CLOSE FILE X