Annual Report 2020-21

Noosa Council
Notes to the Financial Statements
for the year ended 30 June 2021

Note 16. Contract Balances (continued)
§Note/Subtotal§
§Total§




$ '000                                                                                                            2021                   2020


Classified as:
Current Contract Liabilities                                                                                     4,377                  1,568
Non-Current Contract Liabilities                                                                                     –                      –
Total Contract Liabilities                                                                                      4,377                   1,568


Revenue recognised that was included in the Contract Liability balance at the beginning of
the year

Funds to Construct Council Controlled Assets                                                                     1,434                     69
Funds received in advance of services provided                                                                     127                      –
Total Revenue included in the Contract Liability                                                                1,561                     69


(c) Significant changes in contract balances
§Total§




The completion of the Orealla Bridge project during the year saw the grants funds previously recognised as a contract liability being
transfered to revenue as all performance obligations had been met.




Note 17. Leases
§Note§




§Subnote§




Council as a Lessee
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.

Where Council assesses that an agreement contains a lease, a right of use asset and lease liability is recognised on inception
of the lease. Council does not separate lease and non-lease components for any class of assets and has accounted for lease
payments as a single component.

The right-of-use asset is measured using the cost model where cost on initial recognition comprises: the lease liability, initial
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
impairment of asset accounting policy.

The lease liability is initially recognised at the present value of the remaining lease payments at the commencement of the
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.

Exceptions to lease accounting

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
on a straight-line basis over the lease term.

Leases at significantly below market value / concessionary leases

Council has elected to measure the right of use asset arising from the concessionary leases at cost which is based on the
associated lease liability at initial recognition.




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