Woodside Petroleum Ltd|Financial Statements 133
E.10 Other accounting policies
(a) Summary of other signiﬁcant accounting policies
The parent and its wholly owned Australian controlled entities have
elected to enter a tax consolidation, with Woodside Petroleum Ltd
as the head entity of the tax consolidated group. The members of
the tax consolidated group are identiﬁed in Note E.9.
The tax expense/(beneﬁt), deferred tax liabilities and deferred tax
assets arising from temporary dierences of the members of the
tax consolidated group are recognised in the separate ﬁnancial
statements of the members of the tax consolidated group, using
the stand-alone approach.
Entities within the tax consolidated group have entered into a tax
funding arrangement and a tax sharing agreement with the head
entity. Under the tax funding agreement, Woodside Petroleum Ltd
and each of the entities in the tax consolidated group have agreed to
pay or receive a tax equivalent payment to or from the head entity,
based on the current tax liability or current tax asset of the entity.
The tax sharing agreement entered into between members of
the tax consolidated group provides for the determination of the
allocation of income tax liabilities between the entities, should the
head entity default on its tax payment obligations. No amounts
have been recognised in the ﬁnancial statements in respect of
this agreement as payment of any amounts under the tax sharing
agreement is considered remote.
(b) New and amended accounting standards and
The Group adopted AASB 15 as of 1 January 2018.
AASB 15 provides a single, principles-based ﬁve-step model to
be applied to all contracts with customers.
The Group adopted the new standard using the full retrospective
approach and applied the practical expedient per AASB 15.C5(b).
The Group’s new revenue accounting policy is detailed in Note A.1.
Revenue will be recognised using the sales method of accounting
rather than the entitlements method. The sales method results in
recording revenue when the products are delivered to customers,
as opposed to the Group’s percentage interest in production from
a producing ﬁeld. An opening adjustment of a US$14 million loss has
been recognised in retained earnings as at 1 January 2017 and a
US$45 million increase in proﬁt has been recognised for the year
ended 31 December 2017.
n the normal course of business, the Group enters into long-
term sales contracts. Provisions are included in the contracts
to renegotiate prices to align to current market conditions at a
given point in time. Where the new pricing formula is not agreed
by the time the contract enters a price review period, revenue
is recognised at the amount to which the Group expects to be
entitled. No opening adjustments were recognised.
The impact of AASB 15 adoption and representation of other
ﬁnancial assets is as follows:
Impact on equity (increase/(decrease))
Receivables () ()
Deferred tax liabilities ()
Retained earnings ()
1. Product receivables containing variable components held at fair value were
previously presented within receivables at 31 December 2017. These are now
presented as other ﬁnancial assets in the statement of ﬁnancial position.
2. Adjustment to payables relates to reversal of revenue entitlements.
Impact on the income statement and earnings per share
Other expenses ()
Income tax expenses ()
Proﬁt for the year attributable to equity holders of the parent
Basic and diluted earnings per share (EPS) attributable to
equity holders of the parent (US cents)1
1. EPS adjustment reﬂects the impact of AASB 15. It has not been adjusted for
theoretical ex-rights price factor associated with the equity raising (refer to
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018