Notes to the financial statements (continued) Section 1: Basis of preparation (continued) 2. Basis of accounting (continued) F. Foreign currency translation Presentation and functional currency These financial statements are presented in Australian dollars, being the functional currency of Western Power. All financial information presented in Australian dollars has been rounded off to the nearest million ($M), unless otherwise stated. Transactions and balances Transactions in currencies other than the functional currency of Western Power are translated into Australian dollars using the exchange rates at the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at closing exchange rates. Non-monetary items measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the dates the fair values were determined. All foreign currency translation differences are recognised on a net basis in ‘Other expenses’ in profit or loss, except: • when deferred in equity for translation differences of qualifying cash flow hedges, to the extent the hedge is effective • when the translation differences deferred to equity for qualifying cash flow hedges are transferred to the carrying value of non-financial assets.
G. Goods and services tax (GST) Income, expenses and assets are recognised net of the amount of associated GST, except when the GST incurred is not recoverable from the taxation authority. In this case, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included in other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. 3. Critical accounting estimates and judgements The preparation of financial statements in conformity with Australian accounting standards requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of income, expenses, assets and liabilities. Actual results may differ from these estimates. Estimates, judgements and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on Western Power and that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the reporting year in which the estimate is revised and any future reporting years affected. Significant judgements, estimates and assumptions The areas where estimates and assumptions are significant to the financial statements, or a higher degree of judgement or complexity is involved, are shown in table 1 below and described in more detail in the related notes.
Table 1: Significant judgements, estimates and assumptions Critical accounting estimates and judgements
Note
4(c) and 9(d) 9(e) and 17(c)(i) 11(g) 11(h) and 12(f) 12(e) and 19(d)
Unbilled network tariff revenue Impaired trade receivables Depreciation and amortisation Impairment of non-financial assets Present value of lease liabilities Present value of employee benefit liabilities Fair values of derivative financial instruments
14(c) 21(b)
Western Power Annual Report 2025
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