Heide Museum of Modern Art 2010 Annual Report

14. Notes to the Financial Statements
g Financial instruments
Recognition
Financial instruments are initially
measured at cost on trade date, which
includes transaction costs, when the related
contractual rights or obligations exist.
Subsequent to initial recognition these
instruments are measured as set out below.
Available-for-sale financial assets
All of the company’s investments are
classified as available-for-sale financial
assets. Available-for-sale financial assets
are reflected at fair value. Unrealised gains
and losses arising from changes in fair
value are taken directly to equity.
Fair value
Fair value is determined based on current
bid prices for all quoted investments.
Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an active
market and are stated at amortised cost
using the effective interest rate method.
Impairment
At each reporting date, the company
assesses whether there is objective
evidence that a financial instrument
has been impaired. In the case of
available-for-sale financial instruments,
a prolonged decline in the value of the
instrument is considered to determine
whether an impairment has arisen.
Impairment losses are recognised in the
income statement.
Note 1: Accounting policies
h Employee benefits
Provision is made for the company’s
liability for employee benefits arising from
services rendered by employees to balance
date. Employee benefits that are expected
to be settled within one year have been
measured at the amounts expected to be
paid when the liability is settled. Other
employee benefits payable later than one
year have been measured at present value.
The company has not accounted for on
costs on these provisions.
Contributions are made by the company to
an employee superannuation fund and are
charged as expenses when incurred.
i Cash and cash equivalents
Cash and cash equivalents include cash on
hand, deposits held at call with banks, and
other short-term highly liquid investments
with original maturities of three months
or less.
j Deferred income
Deferred income shown in the accounts
will be brought to account over the service
delivery period based on the percentage
of completion method. For further details
refer to the revenue recognition policy that
follows.
k Revenue
Donated works of art are recognised as
revenue at market value at the time the
works are donated.
Government grants are recognised as
income as they are earned. Where grants
relate to activities not yet undertaken, and
Heide Museum of Modern Art
2010 Annual Report
there is an obligation to repay those funds
if they are not spent for the approved
purpose then such funds are recognised
as deferred income until such time as the
funded activities are undertaken.
Revenue from the sale of goods is
recognised upon the delivery of goods to
customers.
Interest revenue is recognised on a
proportional basis taking into account the
interest rates applicable to the financial
assets.
Dividend revenue is recognised when
the right to receive a dividend has been
established.
Donation income is recognised when it is
received.
Other revenue is recognised when the
right to receive the revenue has been
established.
All revenue is stated net of the amount of
goods and services tax (GST).
l Goods and Services Tax (GST)
Revenues, expenses and assets are
recognised net of the amount of GST,
except where the amount of GST incurred
is not recoverable from the Australian
Taxation Office. In these circumstances
the GST is recognised as part of the cost
of acquisition of the asset or as part of
an item of the expense. Receivables and
payables in the statement of financial
position are shown inclusive of GST.
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