Annual Report 2014

NOOSA SHIRE COUNCIL

Notes to the Financial Statements
For the six months ending 30 June 2014
                    Council uses internal engineers to assess the condition and cost assumptions associated with all
                    infrastructure assets, the results of which are considered in combination with the relevant indices
                    independently published for the Sunshine Coast Region. Together these are used to form the basis of a
                    management valuation for infrastructure asset classes in each of the intervening ycars. With respect to
                    the valuation of the land and improvements, and buildings classes in the intervening years,
                    management engage independent, professionally qualified valuers to perform a desktop valuation. A
                    desktop valuation involves management providing updated information to the valuer regarding
                    additions, deletions and changes in assumptions such as useful life, residual value and condition rating.
                    The valuer then determines suitable indices which are applied to each of these asset classes.
                    On revaluation, accumulated depreciation is restated proportionately with the change in the carrying
                    amount of the asset and any change in the estimate of remaining useful life.
                     Separately identified components of assets are measured on the same basis as the assets to which they
                    relate.
          (d)        Capital work in progress
                    The cost of property, plant and equipment being constructed by the Council includes the cost of
                     purchased services, materials, direct labour and an appropriate proportion of labour overheads.
         {e)         Depreciation
                     Land is not depreciated as it has an unlimited uscful life. Depreciation on other property, plant and
                     equipment assets is calculated on a straight-line basis so as to write-off the net cost or revalued amount
                     of each depreciable asset, less its estimated residual value, progressively over its estimated useful life
                     to the Council. Management believe that the straight-line basis appropriately reflects the pattern of
                     consumption of all Council assets.
                     Assets are depreciated from the date of acquisition or, in respect of intemally constructed assets, from
                     the time an asset is completed and commissioned ready for use.
                     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 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,
                     Major spares purchased specifically for particular assets that are above the asset recognition threshold
                     are capitalised and depreciated on the sarne basis as the asset to which they relate.
                     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 pericd of the lease,
                     whichever is the shorter.

                     Depreciation methods, estimated useful lives and residual values of property, plant and equipment
                     assets are reviewed at the end of each reporting period and adjusted where necessary to reflect any
                     changes in the pattern of consumption, physical wear and tear, technical or commercial obsolescence,
                     or management intentions. The condition assessments performed as part of the annual valuation
                     process for assets measured at depreciated current replacement cost are used to estimate the useful
                     lives of these assets at each reporting date.
                     Details of the range of estimated useful lives for each class of asset are shown in note 18 (6).
          (0)        Land under roads
                     Land under roads acquired before 30 June 2008 is recognised as a non-cusrent asset where the Council
                     holds title or a financial lease over the asset. The Noosa Shire Council currently does not have any
                     such land holdings.
                     Land under the road network within the Council area that has been dedicated and opened for public use
                     under the Land Act 1994 or the Land Title Act 1994 is not controlled by council but is controlled by
                     the state pursuant to the relevant legislation. Therefore this land is not recognised in these financial
                     statements,

   1,19         Intangible Assets
                     Intangible assets with a cost or other value exceeding $5,000 are recognised as intangible assets in the
                     financial statements, items with a lesser value being expensed.
                     Expenditure on research activities relating to internally-generated intangible assets is recognised as an
                     expense in the period in which it is incurred.
                     Costs associated with the development and procurement of computer software are capitalised and are
                     amoniised on a straight-line basis over the period of expected benefit to Council.
                 :                                                                                                                      certified statements
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