Annual Report 2021-22

Noosa Council
Notes to the Financial Statements
for the year ended 30 June 2022

Note 15. Property, Plant and Equipment (continued)
§Note/Subtotal§




(a) Recognition and Measurement
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 set out in the table contained in this note.

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, 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.

Capital Work in Progress

The cost of property, plant and equipment being constructed by Council includes the cost of purchased services, materials,
direct labour and an appropriate proportion of labour overheads.


(b) Depreciation
§Subnote§




Land is not depreciated as it has an unlimited useful life. Depreciation on other property, plant and equipment assets is
calculated on a straight-line basis so as to write-off the net cost or revalued amount of each depreciable asset, less its estimated
residual value, progressively over its estimated useful life to the Council. Management believe that the straight-line basis
appropriately reflects the pattern of consumption of all Council assets.

Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is
completed and commissioned ready for use.

Where assets have separately identifiable components that are subject to regular replacement, these components are assigned
useful lives distinct from the asset to which they relate. Any expenditure that increases the originally assessed capacity or
service potential of an asset is capitalised and the new depreciable amount is depreciated over the remaining useful life of
the asset to the Council.

The depreciable amount of improvements to or on leasehold land is allocated progressively over the estimated useful lives of
the improvements to the Council or the unexpired period of the lease, whichever is the shorter.

Depreciation methods, estimated useful lives and residual values of property, plant and equipment assets are reviewed at the
end of each reporting period and adjusted where necessary to reflect any changes in the pattern of consumption, physical
wear and tear, technical or commercial obsolescence, or management intentions.

The condition assessments performed as part of the annual valuation process for assets measured at depreciated current
replacement cost are used to estimate the useful lives of these assets at each reporting date. Road formation has an unlimited
life and is not subject to depreciation. The range of estimated useful lives for each class of asset are detailed in the table
contained in this note.




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