Annual Report 2018-19

                                                                                                  Financial Statements 2019



Noosa Shire Council

Notes to the Financial Statements
for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

   Leases in which the Council is a lessee
                                                                  Transition method
   The Council will recognise new assets and liabilities
   for its operating leases of IT equipment and land              The Council intends to apply AASB 16 initially on 1 July
   parcels. The nature of expenses related to those               2019, using the modified retrospective approach.
   leases will now change because the Council will                Therefore, the cumulative effect of adopting AASB 16
   recognise a depreciation charge for right-of-use               will be recognised as an adjustment to the opening
   assets and interest expense on lease liabilities.              balance of retained earnings at 1 July 2019, with no
                                                                  restatement of comparative information.
   Previously, the Council has recognised an operating
   lease expense on a straight-line basis over the term of        The Council intends to apply the practical expedient for
   the lease, and recognised assets and liabilities only to       the definition of a lease on transition. This means that it
   the extent that there was a timing difference between          will apply AASB 16 on transition only to contracts that
   actual lease payments and the expense recognised.              were previously identified as leases applying AASB 117
                                                                  Leases and Interpretation 4 Determining whether an
   The Council has elected not to recognise IT                    Arrangement contains a Lease.
   equipment leases under the AASB 16 as they have
   been assessed as being low-value assets under the          The standards not expected to have a material impact
   standard.                                                  upon Council's future financial statements are:

   No significant impact is expected for the Council’s        Effective for annual reporting periods beginning on or
   finance leases.                                            after 1 January 2019

   Based on Councils assessment, it is expected that the         AASB 1059        Service    Concession     Arrangements:
   first-time adoption of AASB 16 for the year ending 30          Grantors
   June 2020 will have the following impacts:
                                                                 AASB 1059 Service           Concession     Arrangements:
   - Lease assets and financial liabilities on the balance        Grantors (Appendix D)
   sheet will increase/decrease by $174,267 and
   $174,267 respectively (based on the facts available to        AASB 2016-8 Amendments to Australian Accounting
   Council at the date of assessment).                            Standards - Australian Implementation Guidance for
                                                                  Not-for-Profit Entities
   - There will be a reduction in the reported equity as
   the carrying amount of lease assets will reduce more          AASB 2017-1 Amendments to Australian Accounting
   quickly than the carrying amount of lease liabilities.         Standards - Transfers of Investment Property, Annual
                                                                  Improvements    2014-2016      Cycle   and     Other
   - Net result will be lower on initial application as           Amendments
   depreciation and the lease liability interest will be
   initially higher than operating lease expenses                AASB 2017-4 Amendments to Australian Accounting
   previously recorded.                                           Standards – Uncertainty over Income Tax Treatments
   Leases in which the Council is a lessor                       AASB 2017-6 Amendments to Australian Accounting
                                                                  Standards – Prepayment Features with Negative
   No significant impact is expected for other leases in          Compensation
   which the Council is a lessor.
                                                                 AASB 2017-7 Amendments to Australian Accounting
   Peppercorn Leases
                                                                  Standards – Long-term Interests in Associates and
                                                                  Joint Ventures
   Council is the leasee of a number of Deed of Grant in
   Trust leases, for which no or little lease payments are
                                                                 AASB 2018-1 Amendments to Australian Accounting
   made. These have been identified as peppercorn
                                                                  Standards – Annual Improvements 2015–2017 Cycle
   leases which are currently not recognised in Council's
   financial statements. Council does not intend to elect
                                                                 AASB 2018-2 Amendments to Australian Accounting
   not to apply the fair value measurement requirements
                                                                  Standards – Plan Amendment, Curtailment or
   to these leases until such time as this requirement is
                                                                  Settlement
   mandated.
                                                                 AASB 2018-3 Amendments to Australian Accounting
                                                                  Standards – Reduced Disclosure Requirements



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