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

   10   Asset Disposal /Write-off
   An asset is written-off when destroyed, scrapped, lost or stolen and recorded in the Statement of
   Comprehensive Income. When consideration is received in the form of proceeds or trade-in, the
   asset is to be disposed in the financial asset register and a gain or loss on sale recognised in the
   Statement of Comprehensive Income.
   If the asset is to be sold, the provisions of AASB5 Non-Current Assets Held for Sale and Discontinued
   Operations may apply.
   The cost of demolition or removal of the old asset can be capitalised as site preparation costs of the
   new asset only if there is:
   °     No provision for restoration of the old asset; and
   °     Prior to demolition a formal Council commitment to demolish and build on the site of the old
        asset, e.g. Council meeting minute.

   If an asset is demolished or removed and there is no formal commitment to rebuild on the site prior
   to demolition or removal, the costs are to be expensed.
   Where an asset is valued at fair value and the costs of demolition or removal have been capitalised
   as site preparation costs, consideration should be given to impairment tests to ensure the asset
   value is not overstated.

   11.  Non-Current Asset Register
   A list of all of Council’s non-current assets, other than those items which are under the asset
   threshold and treated as an expense, must be recorded in a register which is to be kept by Council.
   The asset register is to record as a minimum:
   a)   opening and closing balances;
   b)   capital expenditures;
   c)   depreciation charges;
   d)   revaluation increments and decrements;
   e)   disposals/write offs;
  f)    contributed assets and previously unrecognised assets;
   g) _ internal transfers;
   h)   impairment losses; and
   i)   relevant dates for all the above transactions.

   12   Depreciation
   Where non-current assets have a limited useful life they must be depreciated in accordance with
   AASB116 Property, Plant and Equipment.        Depreciation is the systematic allocation of the
   depreciable amount of an asset over its useful life. Depreciation begins when an asset is available
   for use and ceases at the earlier of:
   a)   The date the asset is classified as held for sale; and
   b)   The date that the asset is disposed or written-off

   Each component will be depreciated separately. The depreciation charge for each period is classified
   as an expense in the Statement of Comprehensive Income. Depreciation forms part of the cost of
   operations and contributes directly to Council’s net operating result.

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