Lendlease Annual Report 2024

102 Lendlease Annual Report 2024 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 2024, 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 • 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. Material accounting policies have been: • Included in the relevant notes to which the policies relate, while other material accounting policies are discussed in Note 38 ‘Other Material 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 material 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 • The Group considers the following as material accounting estimates and judgements: – Revenue recognition. Refer to Note 4 'Revenue from Contracts with Customers' for further detail – Recoverability of inventories. Refer to Note 11 'Inventories' for further detail – Asset valuation. Refer to Note 12 ‘Equity Accounted Investments’ , Note 13 ‘Other Financial Assets’ and Note 26 ‘Fair Value Measurement’ for further detail – Recoverability of goodwill in relation to the overseas construction businesses. Refer to Note 32 'Intangible Assets' for further detail – Provision estimation in relation to the UK building remediation. Refer to Note 23 'Provisions' for further detail – The contingent liability in relation to the Retirement Living tax matter. Refer to Note 27 'Contingent Liabilities' for further detail • These material accounting estimates and judgements have been considered in the context of the current 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. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release of capital from its offshore development project and assets. Financial impacts include impairment charges on Goodwill and Development projects and other related costs to accelerate the release of capital. These impacts have been disclosed in the relevant notes to the consolidated financial statements. The Consolidated Financial Statements are prepared on a going concern basis. In preparing the Consolidated Financial Statements, including assessing the going concern basis of accounting, the Group has considered the general market conditions. The Group has: • $1,159 million in undrawn facilities. See Note 16 ‘Borrowings and Financing Arrangements’ • $350 million in undrawn uncommitted facilities maturing October 2024. See Note 16 'Borrowings and Financing Arrangements' • $1,000 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 Consolidated Financial Statements.