Annual Report 2019-20

Noosa Shire Council

Notes to the Financial Statements
for the year ended 30 June 2020

Note 17. Contract Balances (continued)
                                                                                                2020            2019
                                                                                 Notes          $'000           $'000


(b) Contract Liabilities

Funds received upfront to construct Council controlled assets                      #            1,568

TOTAL CONTRACT LIABILITIES                                                                     1,568

Classified as:
Current Contract Liabilities                                                                    1,568
Non-current Contract Liabilities                                                                    -
Total contract liabilities                                                                      1,568

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

Funds to construct Council controlled assets                                                       69

Total Revenue included in the Contract Liability                                                   69

(c) Significant changes in Contract Balances

The contract assets and liabilities have arisen on adoption of AASB 15 and AASB 1058. Previously the revenue
was recognised on receipt and therefore there was no effect on the Statement of Financial Position.

Note 18. Leases
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.




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