Annual Report 2015-16

Financial Statements 2016

 Noosa Shire Council

 Notes to the Financial Statements
  for the year ended 30 June 2016
 Note 1. Summary of Significant Accounting Policies (continued)

 assets (which have a recognition threshold of $1), | Non-current physical assets measured at fair value
 are treated as an expense in the year of acquisition. | are revalued, where required, so that the carrying
 All other items of property, plant and equipment are    amount of each class of asset does not materially
capitalised.                                             differ from its fair value at the reporting date. This is
                                                         achieved by engaging independent,       professionally
 The   classes  of property,  plant  and   equipment     qualified valuers to determine the fair value for each
 recognised by Council are reported in note 11.          class of property, plant and equipment assets at least
                                                         once every 3 years. This process involves the valuer
 Acquisition of assets                                   physically sighting a representative sample of Council
                                                         assets across all asset classes and making their own
 Acquisitions of assets are initially recorded at cost.  assessments of the condition of the assets at the date
 Cost is determined as the fair value of the assets      of inspection.
 given as consideration plus costs incidental to the           :         f            :
 acquisition, including freight in, architect's fees and Council  uses _ internal SAgINesTs   iS  Gee Oee the
 engineering design fees and all other establishment     Condition and cost assumptions associated with all
    ete                                                  infrastructure assets,  the  results  of  which   are
                                                         considered in combination with the relevant indices
 Property,  plant and equipment received in the form     |ndependently   published for the Sunshine     Coast
of contributions    are. recognised  as assets and       Region. Together these are used to form the basis of
 revenues at fair value by Council valuation where       =  management valuation for infrastructure      asset
 that value exceeds the recognition thresholds for the   classes in each of the intervening Hen  With respect
 respective asset class.  Fair value is the price that  to the valuation of the land and improvements, and
 would be received to sell the asset in an orderly       buildings   classes   “a   the _ intervening   yeas,
 transaction  between   market   participants at the     management     aoe       independent,  professionally
 measurement date:                                       qualified valuers to perform a desktop valuation. A
                                                         desktop valuation involves management providing
 Capital and operating expenditure                       updated information to the valuer regarding additions,
                                                         deletions and changes in assumptions such as useful
 Direct labour and materials and an appropriate         life, residual value and condition rating, The waliae
 proportion of overheads incurred in the acquisition or  then determines suitable indices which are applied to
 construction  of  assets   are  treated  as_  capital   each of these asset classes.
 expenditure.   Assets under construction are not                    ‘                       5  FRc 3
 depreciated    until  they   are   completed    and     On revaluation, accumulated depreciation is restated
 commissioned, at which time they are reclassified       Ploportionately with  the  change   in the   carrying
 from work in progress to the appropriate property,      amount of the asset and any change in the estimate
 plant and equipment class.                              of remaining useful life.
 Routine operating maintenance, repair costs and         Separately  identified components    of  assets   a
 minor renewals to maintain the operational capacity   | Measured on the same basis as the assets to which
 and useful life of the non-current asset is expensed    they relate.
 as   incurred, while  expenditure   that  relates to        .        .
 replacement of a major component of an asset to        Capital work in progress
 maintain its service potential is capitalised.          The cost of property, plant and equipmient: being
 Valuation                                               constructed by the Council includes the cost of
 a                                                       purchased services, materials, direct labour and an
 Land and improvements, buildings, major plant and       appropriate proportion of labour overheads.
 all  infrastructure assets are   measured   on   the           wy
 revaluation basis, at fair value, in accordance with    Depreciation
(a Fale Wels Codteriaaa Giner “leat ead                  Land  is not depreciated as it has an unlimited useful
 equipment and work in progress are measured at         life. Depreciation   on  other property, plant    and
 cost.                                                   equipment assets is calculated on a straight-line basis
                                                         so as to write-off the net cost or revalued amount of
                                                                                                       page 9