Chairman's - QPAC

QUE E NSL A N D PE RFO RM I NG ARTS TRUST
NOTES TO THE FINANCIAL REPORT
QUE E NSL A N D PE RFO RM I NG ARTS TRUST
NOTES TO THE FINANCIAL REPORT
For the Year Ended 30 June 2006
For the Year Ended 30 June 2006
Note 2
Significant Accounting Policies (Continued)
Note 2
Significant Accounting Policies (Continued)
(c)
Recognition and measurement of property, plant and equipment
Acquisition
The purchase method of accounting is used for all acquisitions of assets, being the fair value of the assets provided
as consideration at the date of acquisition plus any incidental costs attributable to the acquisition.
Recognition thresholds
Items of property, plant and equipment with a cost or other value equal to or in excess of the following thresholds
are capitalised in the year of acquisition. All other items are expensed in the year of acquisition:
— Buildings and infrastructure $10,000
— Land $1
— Plant and equipment $5,000
— Heritage and cultural assets $5,000
Revaluation
Land, buildings, infrastructure, heritage and cultural assets are measured at fair value. All other assets are measured
at cost. This is in accordance with the Queensland Treasury’s Non-Current Asset Accounting Policies for the Public
Sector.
Non-current physical assets measured at fair value are comprehensively revalued at least once every five years
with interim valuations, using appropriate indices, being otherwise performed on an annual basis where the change
would be material to that class of assets.
Only those assets, the total values of which are material, compared to the value of the class of assets to which they
belong, are comprehensively revalued.
Separately identified components of assets are measured on the same basis as the assets to which they relate.
Where the assets are revalued, the revaluation increments are credited directly to the asset revaluation reserve
except to the extent that an increment reverses a prior year decrement for that class of asset that had been
recognised as an expense, in which case the increment is recognised as revenue up to the amount of the expense.
Revaluation decrements are recognised as an expense except where prior increments are included in the asset
revaluation reserve for that class of asset, in which case the decrement is taken to the reserve to the extent of the
remaining increments. Within the same class of assets, revaluation increments and decrements within the year are
offset.
Repairs and maintenance
Routine maintenance, repair costs and minor renewal costs are expensed as incurred. Where the repair relates to the
replacement of a component of an asset and the cost exceeds the capitalisation threshold the cost is capitalised and
depreciated.
Operating leases
Lease payments for operating leases are recognised as an expense in the years in which they are incurred as this
reflects the pattern of benefits derived by the Trust.
Finance leases
The Trust has not entered into any finance leases.
(d)
Depreciation and amortisation of property, plant and equipment
Land is not depreciated as it has an unlimited useful life.
Depreciation on buildings, infrastructure and equipment and motor vehicles, is calculated on a straight-line basis
so as to write-off the net cost or revalued amount of each depreciable asset, less its estimated residual value,
progressively over its estimated useful life to the Trust.
Capital work-in-progress is not depreciated until it reaches service delivery capacity.
Where assets have separately identifiable components, these components are assigned useful lives distinct from the
asset to which they relate. Any expenditure that increases the originally assessed capacity or service potential of an
asset is capitalised and the new depreciable amount is depreciated over the remaining useful life.
The depreciable amount of improvements to or on leasehold land is allocated progressively over the estimated
useful lives of the improvements to the Trust or the unexpired period of the lease, whichever is shorter.
Major depreciation rates used are listed below and are consistent with the prior year unless otherwise stated:
Buildings and leasehold improvements 4 to 20%
Motor vehicles 20%
Plant and equipment 1 to 33%
Concert Hall Grand Organ 2%
Intangibles
All intangible assets with a cost or other value greater than $100,000 are recognised in the financial statements,
with items of a lesser value being expensed. Each intangible asset is amortised on a straight line basis over its
estimated useful life to the agency, less any anticipated residual value. Current amortisation rates are either 20% or
33.3%
Impairment of non-current assets
All non-current physical and intangible assets are assessed for indicators of impairment on an annual basis. If an
indicator of possible impairment exists the assets recoverable amount is determined. The recoverable amount is
determined as the higher of the assets fair value (net of selling costs) and the depreciated replacement cost.
An impairment loss is immediately recognised in the income statement. If the asset in question is carried at a
revalued amount then any impairment loss is first offset against the asset revaluation reserve of the relevant asset
class to the extent available.
If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount, but only to the extent that the carrying amount does not exceed the carrying amount
that would have been determined had no previous impairment loss been recognised for the asset. A reversal of an
impairment loss is recognised as income, unless the asset is carried at a revalued amount, in which case the reversal
of the impairment loss in treated as a revaluation increase.
Cash assets
For the purposes of the Balance Sheet and the Cash Flow Statement, cash assets include all cash and cheques
receipted but not banked at 30 June 2006 as well as deposits at call with financial institutions. It also includes
liquid investments with short periods to maturity that are convertible readily to cash on hand, at the investor’s
option and that are subject to a low risk of changes in value.
(e)
(f)
(g)
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