Annual Report 2008-09 - Legal Services Commissioner

Chapter EIGHT
Financial Statements
Notes to the financial statements for the financial year ended 30 June 2009
h. Income recognition
Revenue (including interest income) is brought to
account on receipt, control or official notification.
The Legal Profession Act section 6.7.7 states that the
Legal Services Commissioner must be paid such
amount as determined by the Board to meet the
expenses of, and discharge the liabilities incurred by,
the Commissioner in performing functions under this
Act during the year.
All income received by the Legal Services
Commissioner is paid into the Operating Account with
the exception of Disputed Costs which are paid into a
separate account.
Other gains/(losses) from other economic flows
Other gains/(losses) from other economic flows
include the gains or losses from reclassifications of
amounts from reserves and/or accumulated surplus
to net result, and from the revaluation of the present
value of the long service leave liability due to changes
in the bond interest rates.
i. Expenses
• Employee benefits
Employee benefits expenses include all costs
related to employment including wages and
salaries, leave entitlements, redundancy payments
and superannuation contributions.
These are recognised when incurred, except for
contributions in respect of defined benefit plans.
• Superannuation
The amount charged to the operating statement
in respect of defined benefit superannuation
plans represents contributions made by the Legal
Services Commissioner to the superannuation
plan in respect to the current services of current
Legal Services Commissioner staff. Superannuation
contributions are made to the plans based on the
relevant rules of each plan.
The Department of Treasury and Finance centrally
recognises the defined benefit liability or surplus
of most Victorian government employees in such
funds.
Contributions to defined contribution plans are
expensed when incurred.
• Depreciation
Depreciation is provided on plant and equipment.
Depreciation is generally calculated on a straight
line basis, so as to write off the net cost or other
revalued amount of each asset over its expected
useful life to its estimated residual value. The
estimated useful lives, residual values and
depreciation method are reviewed at the end of
each reporting period.
The expected useful lives for each of the asset
classes are as follows:
2009 2008
Motor Vehicles 3 years 3 years
Office Equipment 5 to 10 years 5 to 10 years
Office Furniture 5 to 10 years 5 to 10 years
Computer Equipment 3 to 5 years 3 to 5 years
• Amortisation
Intangible assets with finite useful lives are
amortised on a systematic (typically straight line)
basis over the asset’s useful life. Amortisation
begins when the asset is available for use, that is,
when it is in the location and condition necessary
for it to be capable of operating in the manner
intended by management. The amortisation period
and the amortisation method for an intangible
asset with a finite useful life is reviewed at least
at the end of each annual reporting period. In
addition, an assessment is made at each reporting
date to determine whether there are indicators that
the intangible asset concerned is impaired. If so, the
asset concerned is tested as to whether its carrying
value exceeds its recoverable amount.
• Impairment of assets
Plant and equipment and intangible assets are
reviewed for impairment indications annually or
whenever events or changes in circumstances
indicate that the carrying amount would not be
recoverable. If such indications exist an impairment
test is performed to determine whether the asset’s
carrying value exceeds its recoverable amount
and the difference is written off by a charge to the
operating statement. The recoverable amount for
assets is measured at the higher of the depreciated
replacement cost and fair value less costs to sell.
Legal Services COMMISSIONER 2009 Annual Report 67