Meeting papers

2      Asset Recognition

An asset is recognised as a non-current asset in the financial asset register if it meets all of the
following criteria:
•     Council has control over the asset
•     It is probable that future economic benefits associated with the asset will flow to Council
      (including non-cash service benefits)
•     The cost or fair value of the asset can be measured reliably
•     The cost or fair value of the asset exceeds Council’s asset recognition threshold
•     The asset is expected to be used for more than one financial year.

Costs on assets incurred after initial recognition will be capitalised when the expenditure either
renews, extends or upgrades the asset’s underlying service potential.


3      Recognition Thresholds for Non-Current Assets

Recognition thresholds to be applied on initial acquisition of an asset are as follows:

 Asset Class                           Threshold
 Land*                                                 $1
 Buildings                                         $5,000
 Other Infrastructure Assets                       $5,000
 Plant and Equipment**                             $5,000
 Intangible Assets                                 $5,000
 ICT Equipment                                     $1,000
 Network Assets
 Roads and Bridge Network                               $1
 Storm Water                                            $1
* Minor land parcels have no realisable market value and possess limited or negligible service potential. These minor land
parcels are recorded in Council’s financial asset register at nominal value according to materiality.

The thresholds detailed in the table above must be disclosed by way of note in Council’s general
purpose financial statements.

4        Asset Valuation Method

Assets are to be recorded and maintained in Council’s enterprise management system as either a
financial asset or an operating (non-financial) asset. On initial recognition financial assets will be
measured at fair value based on the cost of the asset. Where an asset is acquired at no cost (i.e.
developer contributed assets) or for nominal consideration, the value is deemed to be its fair value at
the date of acquisition. Fair value is deemed to be either:
•     Market Value if there is market evidence; or
•     Depreciated Current Replacement Cost if there is no market evidence.

Where an asset was acquired in prior financial years and has yet to be recorded in Council’s financial
asset register, the asset is to be brought to account at the fair value as at the date of recognition.




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