Meeting papers

8      Asset Impairment

All assets including intangible assets are to undergo impairment testing on an annual basis by asset
custodians as detailed in Council’s asset responsibility matrix.

9      Asset Derecognition

A financial asset is to be derecognised and removed from the financial asset register whenever:
•     The asset is destroyed, abandoned or decommissioned with no future economic benefit
      expected to be generated from its use
•     The asset is scrapped, sold or traded
•     The asset is lost or stolen or
•     Control of the asset is transferred to another entity.

All assets derecognised from the financial asset register require authorisation by the respective
asset custodian.

Partial derecognition of an infrastructure asset is to occur whenever:
•     A significant component or section of an infrastructure asset is destroyed, abandoned or
      decommissioned with no future economic benefit expected to be generated from its use; or
•     Major renewal works have been undertaken resulting in a significant component or section of
      an infrastructure asset being replaced.

Derecognition should be accounted for in the same financial year in which the asset was removed
from service.

10     Security and Physical Control over Non-Current Assets

The asset custodians shall assume full responsibility for assets within their control. The nature of
some asset classes, such as infrastructure assets which cannot be physically removed, are subject
to regular physical inspection for asset management planning purposes and are inspected for
revaluation purposes. As such they do not require a separate physical stocktake.

The remaining assets (i.e. fleet and ICT equipment) are required to be verified via an annual
stocktake which may include a rolling process conducted over a number of years.

11     Work in Progress

Quarterly reviews of work in progress are to be undertaken to ensure that projects are either
currently in progress or are financially completed and ready to capitalise. Project Managers are
required to review projects monthly to assess reportable progress and determine when constructed
and contributed assets are ready to be commissioned or put into service.

Resulting non-current asset recognitions should be accounted for in the same financial year in
which the relevant assets reach practical completion.


12     Materiality

Materiality plays an essential part in the decision making process and preparation of the general
purpose financial statements. This is because information contained or omitted can impair its
usefulness to users. Materiality is a concept which requires professional judgment. An omission or
misstatement of an item is material if, individually or collectively, it would influence the economic
decisions of users of the financial statements or the accountability of management or governing
body.


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