2016-06-29 Special Meeting Agenda

COUNCIL POLICY – NON CURRENT ASSET ACCOUNTING POLICY


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 the
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.

The depreciation method used shall reflect the pattern in which the asset’s future economic benefits
are expected to be consumed by the entity. Council has adopted the straight-line method of
depreciation to reflect patterns of consumption for all non-current assets other than non-depreciable
land, waste disposal assets and some road components.

Work in progress cannot be depreciated as the assets are not available for use.

Useful Lives and Rates

The useful life of an asset is the estimated period over which a depreciable asset is expected to be
able to provide future service potential. The estimation of the useful life of the asset is a matter of
judgement based on the experience of the entity with similar assets.


13 Asset Review
Asset depreciation rate, remaining useful life and impairment are to be reviewed at least on an annual
basis by Asset custodians and management to ascertain if any amendments are required.




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