TOURISM VICTORIA ANNUAL REPORT

notes to the financial statements
30 june 2008 (continued)
Note 1. Summary of Accounting Policies (CONTINUED)
f) Goods and Services Tax (GST)
Income, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated inclusive of the amount of
GST receivable or payable. The net amount of GST recoverable
from, or payable to, the taxation authority is included with other
receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the
taxation authority, are presented as operating cash flow.
g) Income recognition
Amounts disclosed as revenue are, where applicable,
net of returns, allowances and duties and taxes.
Revenue is recognised for each of Tourism Victoria’s major
activities as follows:
Grant income
Grants payable are recognised as income when Tourism
Victoria gains control of the underlying assets. Where grants
are reciprocal, income is recognised as performance occurs
under the grant. Non-reciprocal grants are recognised
as income when the grant is received or receivable.
Conditional grants may be reciprocal or non-reciprocal
depending on the terms of the grant.
Co-operative revenue
The amount recognised for co-operative ventures refers to
funds directly received and banked by Tourism Victoria for
activities such as brochure participation and co-operative
marketing. Funds from co-operative venture participants
which are reciprocal are recognised as revenue in the year
when co-operative venture activities take place. Funds
received prior to activities having taken place are recognised
as Funds Received in Advance where reciprocal or as
revenue if not reciprocal.
Interest revenue
Interest revenue includes interest received on bank term
deposits, interest from investments, and other interest
received. Interest revenue is recognised on a time
proportionate basis that takes into account the effective
yield on the financial asset.
h) Expenses
Grants and other payments
Grants and other payments to third parties are recognised
as an expense in the reporting period in which they are
paid or payable. They include transactions such as grants,
subsidies and other transfer payments to third parties.
Employee benefits
Employee benefits 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
Defined contribution plans
Contributions to defined contribution superannuation plans
are expensed when incurred.
Defined benefit plans
The amount charged to the operating statement in respect
of defined benefit plan superannuation represents the
contributions made by Tourism Victoria to the superannuation
plan in respect to the current services of current Tourism
Victoria staff. Superannuation contributions are made to the
plans based on the relevant rules of each plan.
Tourism Victoria does not recognise any defined benefit
liability in respect of the superannuation plan because Tourism
Victoria has no legal or constructive obligation to pay future
benefits relating to its employees; its only obligation is to pay
superannuation contributions as they fall due.
The Department of Treasury and Finance centrally
recognises the defined benefit liability or surplus of most
Victorian government employees in such funds.
Depreciation
Depreciation is provided on property, 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 expected useful lives are as follows:
Plant & Equipment
• Computer equipment 3 years (2007: 3 years)
• Others 5 years (2007: 5 years)
These rates are reviewed on an annual basis. Depreciation
is charged on all assets with an acquisition cost of $1,000 or
over (2007: $1,000). These rates are consistent with those
applied in prior years.
Leasehold improvements are depreciated over the period of
the lease or its estimated useful life, whichever is shorter, using
the straight line method. The estimated useful lives, residual
values and depreciation method are reviewed at the end of each
annual reporting period.
76 FINANCIAL REPORT 2007–2008