Annual Report 2016-17

                                                                                             Financial Statements 2017



Noosa Shire Council

Notes to the Financial Statements
 for the year ended 30 June 2017

Note 11. Property, Plant and Equipment



Recognition
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and accumulated impairment losses. Items of property, plant and equipment with a total value of less
than $5,000, $1,000 for computer equipment and $15,000 for Buildings, except for land and network assets (which
have a recognition threshold of $1) are treated as an expense in the year of acquisition. All other items of property,
plant and equipment are capitalised.

The classes of property, plant and equipment recognised by Council are reported in the table below.

Acquisition of assets
Acquisitions of assets are initially recorded at cost. Cost is determined as the fair value of the assets given as
consideration plus costs incidental to the acquisition, including freight in, architect's fees and engineering design
fees and all other establishment costs.
Property, plant and equipment received in the form of contributions, are recognised as assets and revenues at fair
value by Council valuation where that value exceeds the recognition thresholds for the respective asset class. Fair
value is the price that would be received to sell the asset in an orderly transaction between market participants at
the measurement date.

Routine operating maintenance, repair costs and minor renewals to maintain the operational capacity and useful life
of the non-current asset is expensed as incurred, while expenditure that relates to replacement of a major
component of an asset to maintain its service potential is capitalised.


Valuation
Land and improvements, buildings, major plant and all infrastructure assets are measured on the revaluation basis,
at fair value, in accordance with AASB 116 Property, Plant & Equipment and AASB 13 Fair Value requirements.
Other plant and equipment and work in progress are measured at cost.

Non-current physical assets measured at fair value are revalued, where required, so that the carrying amount of
each class of asset does not materially differ from its fair value at the reporting date. This is achieved by engaging
independent, professionally qualified valuers to determine the fair value for each class of property, plant and
equipment assets at least once every 3 years. This process involves the valuer physically sighting a representative
sample of Council assets across all asset classes and making their own assessments of the condition of the assets
at the date of inspection.

Council uses internal engineers to assess the condition and cost assumptions associated with all infrastructure
assets, the results of which are considered in combination with the relevant indices independently published for the
Sunshine Coast Region. Together these are used to form the basis of a management valuation for infrastructure
asset classes in each of the intervening years. With respect to the valuation of the land and improvements, and
buildings classes in the intervening years, management engage independent, professionally qualified valuers to
perform a "desktop" valuation. A desktop valuation involves management providing updated information to the
valuer regarding additions, deletions and changes in assumptions such as useful life, residual value and condition
rating. The valuer then determines suitable indices which are applied to each of these asset classes.




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