Lendlease Annual Report 2022

114 Lendlease Annual Report 2022 Notes to Consolidated Financial Statements Basis of Preparation The consolidated financial report is a general purpose financial report which: • Has been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board, and the Corporations Act 2001 • Complies with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board • Is presented in Australian dollars ($). At June 2022, all values have been rounded off to the nearest million dollars unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 • Has re-presented comparative financial information in the Income Statement, Statement of Comprehensive Income and related Notes for discontinued operations during the year. The comparative information in the Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and related Notes have not been re-presented. Refer to Note 33 ‘Discontinued Operations’ for further details • Is prepared under the historical cost basis except for the following assets and liabilities, which are stated at their fair value: derivative financial instruments, fair value through profit or loss investments, investment properties, and liabilities for cash settled share based compensation plans. Recognised assets and liabilities that are hedged are stated at fair value in respect of the risk that is hedged. Refer to the specific accounting policies within the Notes to the Consolidated Financial Statements for the basis of valuation of assets and liabilities measured at fair value. Significant accounting policies have been: • Included in the relevant notes to which the policies relate, while other significant accounting policies are discussed in Note 38 ‘Other Significant Accounting Policies’ • Consistently applied to all financial years presented in the consolidated financial statements and by all entities in the Group, except as explained in Note 37 ‘Impact of New and Revised Accounting Standards’ . The preparation of a financial report that complies with AASBs requires management to make judgements, estimates and assumptions. • This can affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates • Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively • The significant accounting policies highlight information about accounting judgements in applying accounting policies that have the most significant effects on reported amounts and further information about estimated uncertainties that have a significant risk of resulting in material adjustments within the next financial year • These significant accounting estimates and judgements have been considered in the context of the COVID pandemic and the impact of the other economic conditions. The Group presents assets and liabilities in the Statement of Financial Position as current or non current. • Current assets include assets held primarily for trading purposes, cash and cash equivalents, and assets expected to be realised in, or intended for sale or use in, the course of the Group’s operating cycle or within the next 12 months. All other assets are classified as non current • Current liabilities include liabilities held primarily for trading purposes, liabilities expected to be settled in the course of the Group’s operating cycle and those liabilities due within one year from the reporting date. All other liabilities are classified as non current. At 30 June 2022, the Group is in a net current deficit (current liabilities exceeds current assets) but does not anticipate a significant liquidity risk in the next 12 months. This is due to the Group’s strong financial profile, which includes significant committed undrawn facilities and low gearing ratios. The financial statements are prepared on a going concern basis. In preparing the financial statements, including assessing the going concern basis of accounting, the Group has considered the ongoing COVID pandemic and other economic conditions. The Group has: • $2,647 million in undrawn facilities. See Note 16 ‘Borrowings and Financing Arrangements’ • $1,297 million in cash and cash equivalents. See Note 14 ‘Cash and Cash Equivalents’ . Following this assessment, the Group is well placed to manage its financing and future commitments over the next 12 months from the date of the financial statements.