CQUniversity Annual Report - Central Queensland University

14
Central Queensland University
and Controlled Entities
Notes to the Financial Statements
for the year ended 31 December 2012
(v) Consultancy and contract revenue
Consultancy and contract revenue is recognised upon the delivery of the service to the customer.
(vi) Revenue received prior to delivery
Revenue received prior to the delivery of goods to the customer or delivery of the service to the customer is recognised as
a liability.
(vii) Lease income
Lease income from operating leases is recognised in income on a straight-line basis over the lease term.
(e)
Income tax
Central Queensland University is exempt from income tax by virtue of Section 50-5 of the Income Tax Assessment Act of
1997.
The University’s controlled entities, CQU Travel Centre Pty Ltd, Australian International Campuses Pty Ltd, C Management
Services Pty Ltd, and Health Train Education Services Pty Ltd are subject to income tax and these companies adopt the
“balance sheet” approach under AASB 112 Income Taxes.
CQU Institute of Higher Learning Pte Ltd is subject to income tax and complies with Singapore Financial Reporting
Standards FRS 12 Income Taxes.
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax
losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled. The relevant tax rates are applied to the cumulative amounts of deductible
and taxable temporary differences to measure the deferred tax asset or liability.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
(f)
Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair
value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations,
net of finance charges, are included in other long term payables. Each lease payment is allocated between the liability and
finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance
cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. There are no financial leases as at 31 December 2012.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases (Note 35). Payments made under operating leases (net of any incentives received from the lessor) are
charged to the income statement on a straight-line basis over the period of the lease.
Operating lease payments are representative of the pattern of benefits derived from the leased assets and are expensed in
the periods in which they are incurred.
Incentives received on entering into operating leases are recognised as liabilities. Lease payments are allocated between
rental expense and reduction of the liability.
(g)
Acquisition of assets
The acquisition method of accounting is used for all acquisitions of assets regardless of whether equity instruments or
other assets are acquired. Cost is measured as the fair value of the assets given or liabilities incurred or assumed at the
date of exchange plus incidental costs directly attributable to the acquisition.
Costs incurred on assets subsequent to initial acquisition are capitalised when it is probable that future economic benefits
in excess of the originally assessed performance of the asset will flow to the consolidated entity in future years, otherwise,
the costs are expensed as incurred.