2016-06-29 Special Meeting Agenda

COUNCIL POLICY – NON CURRENT ASSET ACCOUNTING POLICY


14    Valuation of Assets

Measurement after recognition

Once assets have been initially recognised, assets are to be measured under either the cost or the
revaluation model as required by AASB 116 Property Plant and Equipment and the Local Government
Act 2009 and the Local Government Regulations 2012 and shall apply to an entire class of property,
plant and equipment.

After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less
any accumulated depreciation and any accumulated impairment losses.

Revaluation Model

An item of property, plant and equipment whose fair value can be measured reliably shall be carried
at a revalued amount, being its fair value at the date of the revaluation less any subsequent
accumulated depreciation and subsequent accumulated impairment losses.

Cost Model

After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less
any accumulated depreciation and any accumulated impairment losses.

Council applies the following valuation methodology across its asset classes:

 Asset Class                             Valuation Methodology
 Land                                    Revaluation
 Buildings                               Revaluation
 Other Infrastructure                    Revaluation
 Plant & Equipment - General             Cost
 Roads & Bridges                         Revaluation
 Stormwater & Drainage                   Revaluation
 Intangible Assets                       Cost

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 should 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. The Internal 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. Building asset class is valued at fair value
therefore each building component is valued at fair value.

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