Annual Report 2022-23

      Note 16. Intangible Assets                                                                                                          Note 17. Contract Balances (continued)
      §Subnote§




              $ '000                                                                                           2023                2022   $ '000                                                                                                  2023                2022

              Intangible assets are as follows:                                                                                           Classified as:
                                                                                                                                          Current Contract Liabilities                                                                          24,643               3,830
              Opening Gross Carrying value                                                                      891                 616   Total Contract Liabilities                                                                           24,643                3,830
              Disposals                                                                                         (21)                  –
              Work in Progress                                                                                  267                 275
                                                                                                                                          Revenue recognised that was included in the contract liability balance at the
              Closing Gross Carrying value                                                                    1,137                 891   beginning of the year
              Opening Accumulated Amortisation and Impairment                                                 (499)               (449)
              Amortisation in the Period                                                                       (48)                (50)   Funds to construct Council controlled assets                                                           2,254               3,861
              Accumulated amortisation charges written off                                                       17                   –   Funds received in advance of services provided                                                           101                 251
              Closing accumulated amortisation and impairment                                                 (530)               (499)
                                                                                                                                          Total Revenue included in the Contract Liability                                                       2,355               4,112

              Total Intangible Assets - Net Book Value                                                         607                 392    Contract liabilities are significantly higher this year due to Council receiving advance payment of disaster funding from the
                                                                                                                                          Queensland Reconstruction Authority for restoration works relating to the February 2022 flood event that resulted in the
                                                                                                                                          Black Mountain landslide. This program of works is expected to exceed $80 million and will occur over the next 12 months.
              Software assets have a finite life estimated at 10 years.
                                                                                                                                          Satisfaction of Contract Liabilities
                                                                                                                                          The contract liabilities in relation to capital grants relate to funding received prior to the work being performed since revenue
              Note 17. Contract Balances                                                                                                  is recognised as Council constructs the assets. Council expects to recognise the contract liability as income in the next 12
                                                                                                                                          months.




                                                                                                                                                                                                                                                                              Noosa Council Annual Report 2022 - 2023
      §Subnote§




      Contract assets represents the excess of costs incurred in relation to a contract with the customer or construction of an           Note 18. Leases
      asset over the amounts that council has invoiced the customer or the grantor. Where Council has invoiced the customer or
      the grantor amounts in excess of what it has incurred in relation to a contract or in constructing an asset, this gives rise to a   Council as a Lessee
      contract liability.
                                                                                                                                          Council has leases in place over property and various IT and Office equipment. Council has applied the exception to
                                                                                                                                          lease accounting for leases of low-value assets and short-term leases.
      §TTootal§




              $ '000                                                                                           2023                2022

                                                                                                                                          Where Council assesses that an agreement contains a lease, a right of use asset and lease liability is recognised on inception
              (a) Contract Assets
                                                                                                                                          of the lease. Council does not separate lease and non-lease components for any class of assets and has accounted for lease
              Current                                                                                                                     payments as a single component.
              Contract Assets                                                                                   958                   –
              Other                                                                                               –                   –   The right-of-
                                                                                                                                                    of use asset is measured using the cost model where cost on initial recognition comprises: the lease liability, initial
                                                                                                                                                    of-
              Total Current Contract Assets                                                                    958                    –   direct costs, prepaid lease payments, estimated cost of removal and restoration, less any lease incentives received. The right-
                                                                                                                                          of use is depreciated over the lease term on a straight-line basis and assessed for impairment in accordance with the
                                                                                                                                          of-
              Classified as:                                                                                                              impairment of asset accounting policy.
              Current Contract Assets                                                                           958                   –
                                                                                                                                          The lease liability is initially recognised at the present value of the remaining lease payments at the commencement of the
              Total Contract Assets                                                                             958                   –   lease. The discount rate is the rate implicit in the lease, however where this cannot be readily determined then the Council’s
                                                                                                                                          incremental borrowing rate for a similar term with similar security is used.
              Contracts to Construct Council Owned Assets                                                       958                   –
                                                                                                                                          Exceptions to lease accounting

              (b) Contract Liabilities                                                                                                    Council has applied the exceptions to lease accounting for both short-term leases (i.e. leases with a term of less than or equal
                                                                                                                                          to 12 months) and leases of low-value assets. Council recognises the payments associated with these leases as an expense
              Current                                                                                                                     on a straight-line basis over the lease term.

                                                                                                                                          Terms and conditions of leases
              Grants
              Funds received upfront to construct Council controlled assets                                  24,220               3,729   Land
              Total Grants                                                                                   24,220               3,729   Council leases a parcel of land which is currently being utilised as a commercial slipway. The term of the lease was for 20
                                                                                                                                          years and will expire in 2025, there are no extension provisions contained in the lease. Rent is calculated based on a 3
              Other Services                                                                                                              years average rental value at 6% and is payable for the term of the lease.
              Non-capital performance obligations not yet satisfied                                             423                 101
              Total Other Services                                                                              423                 101   IT and Office Equipment
                                                                                                                                          Council leases a number of items of equipment, many of these assets are considered low value and are therefore not
              Total Current Contract Liabilities                                                            24,643               3,830    subject to lease accounting. The more significant items have lease terms of 3 or more years with fixed payments for the
                                                                                                                                          term of the lease.



262                                                                                                                                                                                                                                                                           263