Note 11: Financial Risk Management continued 15 D uring the year ended 30 June 2022, the Group derecognised contingent consideration liabilities ($62.5m) for amounts payable to former shareholders of Calimmune. The net impact to the profit or loss from all related adjustments associated with the Calimmune acquisition (including impairment expense disclosed in Note 1 and Note 3) was a loss of $24.8m. Other financial liabilities The Group also has foreign currency loans payable that have been designated as a cash flow hedge against forecast sale transactions in foreign currency. An effective hedge is one that meets certain criteria. Gains or losses on the cash flow hedge that relate to the effective portion of the hedge are recognised in equity. Gains or losses relating to the ineffective portion, if any, are recognised in the statement of comprehensive income. Other liabilities also includes contingent consideration liabilities from business combinations. Key Judgements and Estimates Contingent consideration liabilities are valued with reference to our judgement of the expected probability and timing of potential future milestone payments, based upon level 3 inputs under the fair value hierarchy, which is then discounted to a present value using appropriate discount rates with reference to the Group’s incremental borrowing rates. Valuation of financial instruments For financial instruments measured and carried at fair value, the Group uses the following to categorise the method used: • Level 1: Items traded with quoted prices in active markets for identical liabilities • Level 2: Items with significantly observable inputs other than quoted prices in active markets • Level 3: Items with unobservable inputs (not based on observable market data) There were no transfers between Level 1 and Level 2 during the year, or any transfers into Level 3. Financial assets/(liabilities) measured at fair value 2022 US$m 2021 US$m Publicly traded securities (Note 2) Level 1 381.1 – Contingent consideration liabilities from business combinations (Note 15)15 Level 3 (268.6) (345.8) Note 12: Equity and Reserves (a) Contributed Equity 2022 US$m 2021 US$m Ordinary shares issued and fully paid 4,988.4 – Share buy-back reserve (4,504.6) (4,504.6) Total contributed equity 483.8 (4,504.6) Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Where the Group reacquires its own shares, for example as a result of a share buy-back, those shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid to acquire the shares, including any directly attributable transaction costs net of income taxes is recognised directly as a reduction in equity. Ordinary shares receive dividends as declared and, in the event of winding up the company, participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the company. Share buy-backs were undertaken at higher prices than the original subscription prices which reduced the historical balance for ordinary share contributed equity to nil. The share buy-back reserve was created to reflect the excess value of shares bought over the original amount of subscribed capital. Information relating to changes in contributed equity is set out in Note 10. CSL Limited Annual Report 2021/22 125
RkJQdWJsaXNoZXIy MjE2NDg3