9365206761

Recognition of revenue ($1,754m) (continued)

-    inherent comp!exity in the Group's customer billings processes to estimate energy consumed and to determine the relevant tariff rates; and -    judgement required to audit management's revenue accrual models which estimate the revenue accrued for the unbilled period between the customer's last bill and reporting datę. This estimate includes assumptions as to customers' energy consumption patterns, weather conditions and relevant tariffs; • •    judgement required to audit management's estimate of revenue recognised related to infrastructure services fixed price construction contracts. This estimate includes assumptions for forecast revenue and costs to complete, stage of project completion, and the recoverability of unapproved variations and claims; and •    additional inherent risk of incorrect revenue recognition as a result of the implementation of a new bilłing system during the current year.

•    working with our Information Technology specialists to: -    test key Controls in the revenue process including interfaces between systems, and the timing of revenue recognition over accounting periods; -    obtain an understanding of management's methodology for estimating unbilled revenue and assess .the reasonableness of the methodology and assumptions applied against industry standards and practice; and -    assess the accuracy and completeness of financial data migrated to the new billing system by testing key IT and manuał Controls for data migration. •    testing a sample of gas transmission tariffs and infrastructure services revenue to customer contracts, and where relevant, to variations and claims documentation; •    assessing and challenging managomont'3 ossumpliuns relating to the recoverability of infrastructure services revenue by: -    testing key Controls such as the review and approval of project budgets, variations and actual costs incurred; -    comparing forecast revenue and cost assumptions against source documents including approved project budgets and bid documents. We also compared them to actual costs incurred to datę and the status of project activities; and -    comparing management's assumptions to available correspondence on contract variations and claims, and dispute resolution activities; •    comparing a sample of accrued revenue balances to subsequent customer billings.

Valuation and accounting for derivatives ($418.7m assets; $52.0m liabilities)

Ręfer to the following notes to the financial report: Notę 2(t) Summary of significant accounting policies -Derivative financial instruments and hedging activities, Notę 4(vi) Critical accounting estimates and judgements - Derivative financial instruments, Notę 11 Derivative financial instruments, and Notę 23 Financial risk management.

The key audit matter

How the matter was addressed in our audit

Valuation and accounting for derivatives is a key audit matter due to the: •    size and complexity of the Group’s derivative portfolios, in particular cross currency and interest ratę swaps hedging foreign currency and Australian dollar denominated debt; •    Group undertaking a number of Capital management activities during

With the assistance of our Financial Instrument and Treasury specialists, our procedures included, amongst others: •    evaluating the appropriateness of valuation methodologies and accounting for hedging activities against accounting standard requirements; •    assessing and challenging management's market inputs and assumptions underlying the valuation of derivatives. We compared market inputs and assumptions to independently sourced market data sets including spot

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