Port Hedland Port Authority Annual Report 2011 - Parliament of ...

The collectability of receivables is reviewed on an ongoing basis and any receivables identified as
uncollectible are written-off against the allowance account. The allowance for uncollectible
amounts (doubtful debts) is raised when there is objective evidence that the Authority will not be
able to collect its debts.
(d)
Inventories
Inventories consist of stores which are measured at the lower of cost and net realisable value.
(e)
Property, plant and equipment
Land and buildings (note 13) are shown at cost less subsequent depreciation for buildings. All
other property, plant and equipment are stated at cost less depreciation. Cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Authority and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial period
in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight line method
to allocate their cost or revalued amounts, net of their residual values, over their estimated
useful lives, as follows:
Buildings and Port Improvements 25 - 40 years Straight line
Capital Dredging 40 years Straight line
Navigational Aids 2 - 30 years Straight line
Wharves and Utilities 10 – 40 years Straight line
Office Furniture, Fittings and Equipment 3 – 20 years Straight line
(f)
Impairment
Other assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (cash generating units). Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the impairment at each reporting date.
(g)
Leases
Leases in terms of which the Authority assumes substantially all the risks and rewards of
ownership are classified as finance leases. Upon initial recognition the leased asset is measured at
an amount equal to the lower of its fair value and the present value of the minimum lease
payments. Subsequent to initial recognition, the asset is accounted for in accordance with the
accounting policy applicable to that asset.
Page 59