2015-10-14 Audit & Risk Committee Meeting - Draft Annual Financial Statements

NOOSA SHIRE COUNCIL

Notes to the Financial Statements
For the year ended 30 June 2015

  1. 9      Receivables
            Trade receivables are recognised at the amounts due at the time of sale or service delivery i.e.
            the agreed purchase price / contract price. Settlement of these amounts is required within 30
            days from invoice date.

            The collectability of receivables is assessed periodically and if there is objective evidence that
            Council will not be able to collect all amounts due, the carrying amount is reduced for impairment.
            The loss is recognised in finance costs. The amount of the impairment is the difference between
            the asset’s carrying amount and the present value of the estimated cash flows discounted at the
            effective interest rate.

            All known bad debts were written-off at 30 June. Subsequent recoveries of amounts previously
            written off in the same period are recognised as finance costs in the Statement of
            Comprehensive Income. If an amount is recovered in a subsequent period it is recognised as
            revenue.

            Because Council is empowered under the provisions of the Local Government Act 2009 to sell
            an owner's property to recover outstanding rate debts, Council does not impair any rate
            receivables.

  1. 10     Investments
            Term deposits in excess of three months are reported as investments, with deposits of less than
            three months being reported as cash equivalents.

  1. 11     Investment in associate
            As at 1 July 2010 a water distribution and retail business called Unitywater was established in
            accordance with the South-East Queensland Water (Distribution and Retail Restructuring) Act
            2009 to deliver water and waste water services to customers within the local government areas
            of Moreton Bay Regional Council, Sunshine Coast Regional Council and the now de-
            amalgamated Noosa Shire Council.

            Under the Act, governannce arrangements for Unitywater were established in a Participation
            Agreement which commenced from 1 July 2010. The agreement provides for participation rights
            to be held by the participating Councils. The participating Councils are Noosa Shire Council,
            Moreton Bay Regional Council and the Sunshine Coast Regional Council. The Participation
            Rights effectively represent an investment in an associate by Noosa Shire Council and are
            disclosed in note 11.

            Associates are entities over which Noosa Shire Council exerts significant influence. Significant
            influence is the power to particpate in the financial and operating policy decisions but is not
            control or joint control. Council has determined that Unitywater is an associate for accounting
            disclosure purposes.

  1. 12     Investment Property
            Investment property is property held for the primary purpose of earning rentals and/or capital
            appreciation.

            Investment property is measured using the fair value model. This means all investment property
            is initially recognised as cost (including transaction costs) and then subsequently revaluled
            annually at the reporting date by a registered valuer. Where investment property is acquired at no
            or nominal cost it is recognised at fair value.


            Gains or losses arising from changes in the fair value of investment property are recognised as
            incomes or expenses respectively for the period in which they arise. Investment property is not
            depreciated and is not tested for impairment.




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