Annual Report 2022-23

      Note 15. Property, Plant and Equipment (continued)                                                                                      Note 15. Property, Plant and Equipment (continued)

      (a) Recognition and Measurement                                                                                                         (c) Impairment
      Recognition                                                                                                                             Property, plant and equipment held at cost is assessed for indicators of impairment annually. If an indicator of possible
                                                                                                                                              impairment exists, the Council determines the asset's recoverable amount. Any amount by which the asset's carrying
      Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation       amount exceeds the recoverable amount is recorded as an impairment loss.
      and accumulated impairment losses. Items of property, plant and equipment with a total value of less than $5,000, $1,000 for
      computer equipment and $15,000 for buildings, except for land and network assets (which have a recognition threshold of $1)             (d) Valuation
      are treated as an expense in the year of acquisition. All other items of property, plant and equipment are capitalised.
                                                                                                                                              Land and improvements, buildings, major plant and all infrastructure assets are measured on the revaluation basis, at fair
      The classes of property, plant and equipment recognised by Council are set out in the table contained in this note.                     value, in accordance with AASB 116 Property, Plant and Equipment and AASB 13 Fair Value Measurement requirements.
                                                                                                                                              Other plant and equipment and work in progress are measured at cost.
      Acquisition of Assets
                                                                                                                                              Non-current physical assets measured at fair value are revalued, where required, so that the carrying amount of each class of
      Acquisitions of assets are initially recorded at cost. Cost is determined as the fair value of the assets given as consideration        asset does not materially differ from its fair value at the reporting date. This is achieved by engaging independent, professionally
      plus costs incidental to the acquisition, including freight in, architect's fees, engineering design fees and all other establishment   qualified valuers to determine the fair value for each class of property, plant and equipment assets every three to five years.
      costs.                                                                                                                                  This process involves the valuer physically sighting a representative sample of Council assets across all asset classes and
                                                                                                                                              making their own assessments of the condition of the assets at the date of inspection.
      Property, plant and equipment received in the form of contributions, are recognised as assets and revenues at fair value by
      Council valuation where that value exceeds the recognition thresholds for the respective asset class. Fair value is the price           Council uses internal and external engineers to assess the condition and cost assumptions associated with all infrastructure
      that would be received to sell the asset in an orderly transaction between market participants at the measurement date.                 assets, the results of which are considered in combination with the relevant cost index for region. Together these are used to
                                                                                                                                              form the basis of a management valuation for infrastructure asset classes in each of the intervening years.
      Routine operating maintenance, repair costs and minor renewals to maintain the operational capacity and useful life of the
      non-current asset is expensed as incurred, while expenditure that relates to replacement of a major component of an asset to            With respect to the valuation of land and improvements, and buildings classes in the intervening years, management performs
      maintain its service potential is capitalised.                                                                                          a desktop valuation. A desktop valuation involves management assessing the condition and cost assumptions associated with




                                                                                                                                                                                                                                                                                        Noosa Council Annual Report 2022 - 2023
                                                                                                                                              each asset class in conjunction with the movements in the relevant indices as outlined in the valuation techniques table in
      Capital Work in Progress                                                                                                                Note 15(3). Together these are used to form the basis of the desktop valuation.

      The cost of property, plant and equipment being constructed by Council includes the cost of purchased services, materials,              Recognised Fair Value Measurement
      direct labour and an appropriate proportion of labour overheads.
                                                                                                                                              Council measures and recognises the following assets at fair value on a recurring basis:
      (b) Depreciation                                                                                                                          • Investment property
                                                                                                                                                • Land
      Land is not depreciated as it has an unlimited useful life. Depreciation on other property, plant and equipment assets is                 • Buildings
      calculated on a straight-line basis so as to write-off the net cost or revalued amount of each depreciable asset, less its estimated      • Road and bridge network
      residual value, progressively over its estimated useful life to the Council. Management believe that the straight-line basis              • Storm water
      appropriately reflects the pattern of consumption of all Council assets.                                                                  • Other infrastructure assets

      Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is          Council does not measure any liabilities at fair value on a recurring basis.
      completed and commissioned ready for use.
                                                                                                                                              In accordance with AASB 13 fair value measurements are categorised on the following basis:
      Where assets have separately identifiable components that are subject to regular replacement, these components are assigned
      useful lives distinct from the asset to which they relate. Any expenditure that increases the originally assessed capacity or           Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities,
      service potential of an asset is capitalised and the new depreciable amount is depreciated over the remaining useful life of the
      asset to the Council.                                                                                                                   Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly
                                                                                                                                                       or indirectly,
      The depreciable amount of improvements to or on leasehold land is allocated progressively over the estimated useful lives of
      the improvements to the Council or the unexpired period of the lease, whichever is the shorter.                                         Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

      Depreciation methods, estimated useful lives and residual values of property, plant and equipment assets are reviewed at the            The fair values of the assets are determined using valuation techniques which maximise the use of observable data, where it is
      end of each reporting period and adjusted where necessary to reflect any changes in the pattern of consumption, physical                available, and minimise the use of entity specific estimates. If all significant inputs required to fair value an asset are observable,
      wear and tear, technical or commercial obsolescence, or management intentions.                                                          the asset is included in Level 2. If one or more of the significant inputs is not based on observable market data, the asset is
                                                                                                                                              included in Level 3. This is the case for Council infrastructure assets, which are of a specialist nature for which there is no active
      The condition assessments performed as part of the annual valuation process for assets measured at depreciated current                  market for similar or identical assets. These assets are valued using a combination of observable and unobservable inputs.
      replacement cost are used to estimate the useful lives of these assets at each reporting date. Road formation has an unlimited
      life and is not subject to depreciation. The range of estimated useful lives for each class of asset are detailed in the table          The table below presents all items that are measured and recognised within the Statement of Financial Position at fair value.
      contained in this note.                                                                                                                 In accordance with AASB 13, all fair value measurements are on a recurring basis and categorised as either Level 2 or Level
                                                                                                                                              3 fair value measurements. Council does not have any assets or liabilities measured at fair value which meet the criteria for
                                                                                                                                              categorisation as Level 1.




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