ITF

Notes (forming part of the fi nancial statements) ITF FINANCIAL STATEMENTS I 55 5. Summary of signifi cant accounting policies (continued) b) Investment income/expense and gains/losses on investments Investments are valued at their fair value, which is determined by reference to quoted market bid prices at the balance sheet date. Valuations are provided by the investment managers. Gains or losses arising from this valuation are shown in the consolidated income and expenditure statement in accordance with IAS 39.9. Interest is recognised in the income statement on an accruals basis, and dividend income is recognised when the ITF's right to receive payment is established. c) Currency translation Assets and liabilities in currencies other than US Dollars are translated into US Dollars at appropriate rates of exchange ruling at the balance sheet date. Income and expenses in such currencies during the year have been translated into US Dollars at the rates of exchange ruling at the dates of the relevant transactions. Exchange differences arising from these translations are recognised in the consolidated income and expenditure statement. Sterling was converted at $1.480 /£1 at 31 December 2015 ($1.553/£1 at 31 December 2014), for all subsidiaries except Hopman Cup Pty Ltd. In the case of Hopman Cup Pty Ltd, whose activities are recorded in Australian Dollars, income and expenses are converted at the average rate of exchange, $0.751/A$1 (2014 – $0.912/A$1), and its assets and liabilities are converted at the closing rate, $0.730/A$1 (2014 – $0.816/A$1), for consolidation in these fi nancial statements. The resulting exchange differences are recognised through reserves. d) Property, plant & equipment Property, plant and equipment are stated at cost, less accumulated depreciation. The cost of the tangible fi xed assets is written off in equal instalments over their useful lives as follows: Improvements to leasehold property Over the remaining period of the lease or asset life (if shorter) Computers and Databases 3 years Furniture and Equipment, Technical Equipment 4 years Challenge trophies, which are presented to the winners of the ITF's competitions, including Davis Cup and Fed Cup, are not valued. e) Inventories Inventories are valued at the lower of cost and net realisable value. f) Investments & other fi nancial assets Investments are included on the Balance Sheet on trade date. Investments are valued at their fair value, which is determined by reference to quoted market prices at the balance sheet date, with changes recognised directly in the income and expenditure statement. g) Trade and other receivables Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses. h) Trade and other payables Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method. i) Financial income and expenses Financial income and expenses represent bank interest received and paid by the Group, respectively.

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