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

   15   Revaluation of Assets

   For all assets other than those valued at cost, non-current assets valuations should be reviewed at
   least once each financial year to ascertain if there has been a material movement in fair value
   (depreciated replacement cost/market value) since the last financial year.
   A full revaluation of all applicable asset classes will be undertaken at least once every five years.
   However, when an asset class has significant and volatile changes in fair value a revaluation should
   be undertaken on a more frequent basis. Council’s Audit & Risk Committee is to endorse the scope
   and methodology of all comprehensive valuations.
   If there has been no material movement of fair value, indices/desktop updates, either supplied by a
   qualified valuer or internal qualified staff, may be applied for the intervening years until a full
   revaluation is undertaken. There must be sufficient evidence retained that the index used is robust,
   valid and appropriate to the asset class. If an index is not applied in the prior year the index will then
   be cumulative.

   If an item of property, plant and equipment is revalued, the entire class of property, plant and
   equipment to which that asset belongs shall be revalued. Complex asset components are measured
   on the same basis as the assets to which they relate, e.g. the building asset class is valued at fair
   value therefore each building component is valued at fair value.
   Accounting for Revaluation
   When an asset is revalued, the accumulated depreciation is restated proportionately with the change
   in the gross carrying amount of the asset and any change in the estimate of the remaining useful
   life.

   Changes in the carrying amount of an asset due to a revaluation are accounted for in accordance with
   AASB 116.

   If the carrying amount of a class of assets is increased as a result of a revaluation, the net revaluation
   increase shall be recognised in other comprehensive income and accumulated in equity under the
   heading of revaluation surplus. However, the net revaluation increase shall be recognised in profit or
   loss to the extent that it reverses a net revaluation decrease of the same class of assets previously
   recognised in the Statement of Comprehensive Income.
   If the carrying amount of a class of assets is decreased as a result of a revaluation, the net
   revaluation decrease shall be recognised in the Statement of Comprehensive Income. However, the
   net revaluation decrease shall be recognised in other comprehensive income to the extent of any
   credit balance existing in any revaluation surplus in respect of that same class of asset. The net
   revaluation decrease recognised in other comprehensive income reduces the amount accumulated
   in equity under the heading of revaluation surplus.
   When an asset is disposed of, the amount reported in the asset revaluation surplus in respect of that
   asset is retained in the asset revaluation surplus and not transferred to retained surplus.

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