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

              Separately identified components of assets are measured on the same basis as the assets to
              which they relate.

  1. 13 (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.


  1. 14       Depreciation
              Land is not depreciated as it has an unlimited useful 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 internally 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 same 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 period 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 13.


  1. 15       Payables
              Trade creditors are recognised upon receipt of the goods or services ordered and are measured
              at the agreed purchase/contract price net of applicable discounts other than contingent discounts.
              Amounts owing are unsecured and are generally settled on 30 day terms.


  1. 16       Liabilities - employee benefits
              Liabilities are recognised for employee benefits such as wages and salaries, annual leave and
              long service leave in respect of services provided by the employees up to the reporting date.
              Liabilities for employee benefits are assessed at each reporting date.

  1. 16 (a)        Salaries and wages
              A liability for salaries and wages is recognised and measured as the amount unpaid at the
              reporting date at current pay rates in respect of employees' services up to that date. This liability
              represents an accrued expense and is included in note 16 as a payable.




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