Annual Report 2019-20

Noosa Shire Council

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

Note 18. Leases (continued)
                                                                                                2020            2019
Council as a lessor
When Council is a lessor, the lease is classified as either an operating or finance lease at inception date, based on
whether substantially all of the risks and rewards incidental to ownership of the asset have been transferred to the
lessee. If the risks and rewards have been transferred then the lease is classified as a finance lease, otherwise it is
an operating lease.
If the lease contains lease and non-lease components then the non-lease components are accounted for in
accordance with AASB 15 Revenue from Contracts with Customers .
The lease income is recognised on a straight-line basis over the lease term.

The COVID-19 pandemic has impacted lease revenue for the 2019/20 financial year through the provision of rent
abatements to community and business lessees between March and June 2020.

Operating leases
Where Council retains the risks and rewards relating to a lease, they are classified as operating leases and relate to
the investment property in the statement of financial position.
Rent from investment and other property is recognised as income on a periodic straight line basis over the lease
term.

The minimum lease receipts are as follows:
Not later than one year                                                                          219            227
Later than one year and not later than 5 years                                                   474            299
Later than 5 years                                                                                 -              -
Total lease receipts                                                                            693             526

Rental income from investment property recognised in the operating result is $194,808 (2019: $281,457).
Direct operating expenses primarily for repairs and maintenance on property that did not generate rental income
for the period were $4,662 (2019: $13,149). Direct operating expenses primarily for repairs and maintenance
on property that did generate rental income for the period were $32,636 (2019: $39,449).

There are no restrictions on the realisability of investment property or remittance of income and proceeds of
disposal. The Council does not have any contractual obligations to purchase, construct or develop investment
property or for repairs, maintenance or enhancements.




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