Investor Presentaiton
116
Notes to the Consolidated Financial Statements
2.5
Net finance costs
Net finance costs mainly includes interest on borrowings, derivatives,
and lease liabilities.
2023
2022
$M
$M
Interest expense¹
Interest income³
Total net finance costs
726
632
Less: interest capitalised 2
(28)
(13)
(21)
(19)
677
600
1 Interest expense includes interest on leases of $542 million (2022: $542 million), interest on borrowings and derivatives of $169 million
(2022: $77 million), and interest expense on put option liabilities of $15 million (2022: $13 million).
2 Weighted average capitalisation rate is 3.55% (2022: 2.02%).
3 Interest income recognised by the Group, in its capacity as a lessor, over the lease term. Refer to Note 3.4 forfurther details.
Significant Accounting Policies
Finance costs
Interest expense comprises interest on lease liabilities, which is calculated using the incremental
borrowing rate and interest on borrowings, which is calculated using the effective interest
method and interest on derivatives. Interest costs that are directly attributable to the acquisition,
construction, or production of an asset that takes a substantial period of time to complete and
prepare the asset for its intended use or sale are capitalised into the initial cost of the asset.
Interest income and all other finance costs are recognised in the Consolidated Statement of Profit
or Loss in the period in which they are incurred.
3 Assets and liabilities
3.1
Trade and other receivables
Current
Trade and other receivables consist of amounts owed to the Group by customers
for the sale of goods and services in the ordinary course of business.
Trade receivables
Loss allowance
Trade receivables
Other receivables 1
Loss allowance
Other receivables
Total current trade and other receivables
Non-current
Trade and other receivables
2023
2022
$M
$M
395
278
(4)
(5)
391
273
629
586
(4)
(3)
625
583
1,016
856
132
159
Total non-current trade and other receivables
132
159
Total trade and other receivables
1,148
1,015
1 Includes supplier rebates of $76 million (2022: $82 million).
3.1
Trade and other receivables (continued)
Assets and liabilities
3
117
Annual Report 2023
Woolworths Group
Significant Accounting Policies
Trade and other receivables
Trade and other receivables are recognised initially at fair value and are subsequently measured
at amortised cost using the effective interest method, less a loss allowance. They generally have
terms of up to 30 days.
Impairment of trade and other receivables
The Group assesses the expected credit losses associated with its trade and other receivables
on a forward-looking basis.
The Group applies the simplified approach to measuring expected credit losses, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. To measure
the expected credit losses, trade and other receivables that share similar credit risk characteristics
are grouped together and then assessed for collectability as a whole.
1
highlights
Performance
2
3.2
Inventories
Inventories primarily comprises finished goods.
review
Business
3
Inventories
Provision for inventory obsolescence
Total inventories
2023
$M
2022
$M
Directors'
Report
3,785
(87)
3,670
(77)
3,698
3,593
4
Cost of inventories recognised as an expense within cost of sales during the period was $46,057 million (2022: $43,901 million).
Significant Accounting Policies
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost comprises direct materials and, where applicable, direct labour costs and those overheads
that have been incurred in bringing the inventories to their present location and condition.
Cost is calculated using the weighted average cost method.
Net realisable value represents the estimated selling price less all estimated costs of completion
and all costs to be incurred in marketing, selling and distribution.
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Financial
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