b'< NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019Deferred tax assets and liabilities are recognised for temporarysettled within 12 months after the reporting period; or theredifferences at the tax rates expected to be applied when theis no unconditional right to defer the settlement of the liability assets are recovered or liabilities are settled, based on thosefor at least 12 months after the reporting period. All other tax rates that are enacted or substantively enacted, except for: liabilities are classified as non-current.when the deferred income tax asset or liability arises fromDeferred tax assets and liabilities are always classifiedthe initial recognition of goodwill or an asset or liabilityas non-current.in a transaction that is not a business combination and that, at the time of the transaction, affects neither theCASH AND CASH EQUIVALENTSaccounting nor taxable profits; or Cash and cash equivalents includes cash on hand, deposits when the taxable temporary difference is associated withheld at call with financial institutions, other short-term, highly interests in subsidiaries, associates or joint ventures,liquid investments with original maturities of three months or and the timing of the reversal can be controlled and it isless that are readily convertible to known amounts of cash and probable that the temporary difference will not reverse which are subject to an insignificant risk of changes in value.in the foreseeable futureTRADE AND OTHER RECEIVABLESDeferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable thatTrade receivables are initially recognised at fair value and future taxable amounts will be available to utilise thosesubsequently measured at amortised cost using the effective temporary differences and losses. interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement withinThe carrying amount of recognised and unrecognised deferred30 days.tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longerCollectability of trade receivables is reviewed on an ongoing probable that future taxable profits will be available for thebasis. Debts which are known to be uncollectible are written carrying amount to be recovered. Previously unrecognisedoff by reducing the carrying amount directly. An allowance deferred tax assets are recognised to the extent that it isaccount (provision for impairment of trade receivables) is used probable that there are future taxable profits available towhen there is objective evidence that the group will not be recover the asset. able to collect all amounts due according to the original terms of the receivables.Deferred tax assets and liabilities are offset only where thereis a legally enforceable right to offset current tax assetsThe amount of impairment loss is determined using the against current tax liabilities and deferred tax assets againstsimplified approach to measuring expected credit losses which deferred tax liabilities; and they relate to the same taxableuses a lifetime expected loss allowance. The expected loss rates authority on either the same taxable entity or differentused in measuring the expected credit losses are based on taxable entities which intend to settle simultaneously. historical loss rates, adjusted to reflect current and forward-looking information on macroeconomic factors affecting the CURRENT AND NON-CURRENT CLASSIFICATION ability of the debtors to settle the receivables. These factors include significant financial difficulties of the debtor, the Assets and liabilities are presented in the statement of financialprobability that the debtor will enter bankruptcy or financial position based on current and non-current classification. reorganisation, and default or delinquency in payments are An asset is classified as current when: it is either expectedconsidered indicators that the trade receivables are impaired.to be realised or intended to be sold or consumed in theThe amount of the impairment loss is recognised in consolidated entitys normal operating cycle; it is heldthe consolidated statement of profit or loss and other primarily for the purpose of trading; it is expected to becomprehensive income. When a trade receivable for which realised within 12 months after the reporting period; or thean impairment allowance had been recognised becomes asset is cash or cash equivalent unless restricted from beinguncollectible in a subsequent year, it is written off against exchanged or used to settle a liability for at least 12 monthsthe allowance account. Subsequent recoveries of amounts after the reporting period. All other assets are classified aspreviously written off are credited against other expensesnon-current. in the consolidated statement of comprehensive income.A liability is classified as current when: it is either expected toOther receivables are recognised at amortised cost, lessbe settled in the consolidated entitys normal operating cycle;any allowance for expected credit losses.it is held primarily for the purpose of trading; it is due to be DONACO INTERNATIONAL LIMITED 2019 ANNUAL REPORT 45'