2017-06-06 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA   6 JUNE 2017




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SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                             6 JUNE 2017

   COUNCIL POLICY - NON CURRENT ASSET ACCOUNTING POLICY

   4     Asset Valuation

   Assets are to be recorded and maintained in Council’s enterprise management system as either a
   financial asset or an operating (non-financial) asset. On initial recognition, non-current assets will be
   measured at fair value based on the cost of the asset or for contributed assets using current
   construction unit rates or if required by initial valuation undertaken by a suitably qualified person.
   Costs need to be classified as either:
   °     Capital, which is included in the cost of an asset.  Capital costs are accounted for in the
         Statement of Financial Position and depreciated. They can be for a new, upgrade or renewal
         of an asset; or
   °     An expense in Council’s Statement of Comprehensive Income.

   5     Purchased Assets

   The cost of an item of property, plant and equipment comprises:
   e     Its purchase price, including import duties and non-refundable purchase taxes, after deducting
         trade discounts and rebates;
   °     Any costs directly attributable to bringing the asset to the location and condition necessary for it
         to be capable of operating in the manner intended.
   Directly attributable costs include:
   a)    Costs of employee expenses arising directly from the construction or acquisition of the item of
         property, plant and equipment;
   b)    Costs of site preparation;
   c) _ Initial delivery and handling costs;
   d)    Installation and assembly costs;
   e)    Costs of testing whether the asset is functioning properly; and
  f)     Professional fees.
   Once the asset is in the location and condition necessary for it to be capable of being operated in
   the manner intended, costs will no longer be of a capital nature.
   Costs of assets incurred after initial recognition are to be capitalised whenever the associated work
   either renews, extends or upgrades the asset’s underlying service potential.

   6     Contributed Assets

   Non-current assets that are ontributed to Council at no cost, or for a nominal cost, will need to be
   brought to account at fair value as at the date of acquisition. This is achieved by utilising existing
   construction unit rates or by a valuation undertaken by a suitably qualified person.

   7     Assets Not Previously Recognised
   Material assets not recognised in previous periods that subsequently meet the recognition criteria will
   be recognised from the date that the criteria are met. Where assets are identified that have not been
   previously recognised due to error, e.g. during asset verification, this is treated as the correction of an
   error under AASB 108 Accounting Policies Changes in Accounting Estimates and Errors. The error
   provisions require that the error should be corrected by making the entry that should have been made
   at the time the error occurred.

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