ARTA Annual Report 2009 - Auckland Transport

Items of property, plant and equipment are capitalised on the basis of the costs incurred to acquire, construct
and bring to use the specific physical asset. Direct costs include payments to the supplier for the acquisition
or construction of an asset, employee costs and an appropriate portion of relevant overheads. Costs that
are directly associated with the acquisition and/or construction of the asset controlled by ARTA, and that
will generate economic benefits exceeding costs beyond one year, are recognised as property, plant and
equipment. These costs are depreciated over their estimated useful lives (see below for useful lives per class
of asset).
Costs associated with developing or maintaining property, plant and equipment are recognised as an
expense as incurred.
Where a physical asset is acquired for nil or nominal consideration, the fair value of the asset received is
recognised as revenue. 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 ARTA and the cost of the items can be measured reliably.
It is not the organisation’s policy to revalue property, plant and equipment.
(b)
Depreciation
Land and assets under construction (work in progress) are not depreciated. Depreciation is provided
for other assets on a straight line basis to write off the cost of each asset net of residual value over its
useful life.
The useful lives and associated depreciation rates of major classes of assets have been estimated
as follows:
Rolling Stock
ADK carriage 6 years (16.67%)
ADL carriage 10 years (10%)
SA/SD carriage exterior 15 years (6.67%)
SA/SD carriage interior 7.5 years (13.33%)
SX carriages 2-6 years (16.67-50%)
Locomotives (leasehold improvements) 15 years (6.67%)
Wharves, Piers and Associated Assets
Wharves and piers 10-50 years (2-10%)
Signage 3-10 years (10-33%)
Fencing 2-15 years (6.67-50%)
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