2007 Annual report (PDF 8.1 Mb) - University of Melbourne

FINANCIAL
STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Meanjin Company Ltd ACN 005 097 325
The Victorian Institute for Chemical Sciences Limited ACN 107 013 936 ***
* Not Operational during the year.
** On 30 June 2007, the shares held by the University in Melbourne Ventures Pty Ltd were sold to UMEE Ltd, a subsidiary of the
University. From this date Melbourne Ventures Pty Ltd became a subsidiary of UMEE Ltd.
*** The Victorian Institute for Chemical Sciences Limited (VICS) operated on a June financial year-end until 30 June 2006. In March 2007,
the Board of VICS approved the change of the financial year to a December year-end in order to align its reporting to the University. The
results for VICS included within the Financial Report relate to an eighteen month period from 1 July 2006 to 31 December 2007.
The companies listed, with exception of the overseas subsidiaries in UMEE Ltd, are all incorporated in the State of Victoria. The University
has more than 50% of the voting rights in each of these companies with the exception of Melbourne Business School Ltd (45%) and the
Victorian Institute for Chemical Sciences Limited (33%). These companies are deemed to be subsidiaries for the purpose of this report.
In accordance with AASB 127 Consolidated and Separate Financial Statements the financial statements of each of the above subsidiaries
have been included in the Consolidated Statements. However, summary information is provided in Notes 42 and 43.
Integration of the Victorian College of the Arts
On 29 August 2006, the Victorian Governor in Council assented to the Melbourne University (Victorian College of the Arts) Act 2006, which
enacted the integration of the Victorian College of the Arts (VCA) as a faculty of the University of Melbourne with effect from 1 January
2007. Prior to this date, the VCA was treated as a subsidiary of the University. The legislation was gazetted and proclaimed on 31 August
2006. As a result, all assets and liabilities of the Victorian College of the Arts (VCA) were assumed by the University from 1 January 2007,
and the VCA ceased to exist as a separate reporting entity from that date. Further details about the integration are included in Note 40 to
the Financial Statements.
1.3 Foreign Currency Translation
(i) Functional and Presentational Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in
Australian dollars, which is the University’s functional and presentational currency.
(ii)
(iii)
Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the Income Statement.
Transactions in foreign currencies which are carried out by the library for book purchases are converted to Australian currency at the
rate of exchange on the date on which the currency is purchased. The University hedges its foreign currency exposure in respect of
major purchases of equipment from overseas countries. At the reporting date there were no such hedges in place (2006, Nil).
Group Companies
The assets and liabilities of overseas subsidiaries are translated at year-end rates and operating results are translated at the rates
ruling at the date of transactions.
1.4 Income Recognition
Income is measured at the fair value of the consideration received or receivable. Income is recognised for the major business activities as follows:
(i) Government Financial Assistance
Government grants are recognised at their fair value when there is reasonable assurance that the grant will be received and the Group has
complied with the attached conditions. Such grants are treated as non-reciprocal transfers in accordance with AASB 1004 Contributions.
(ii)
(iii)
(iv)
Government grants which have outstanding performance or return conditions are recognised in accordance with AASB 118 Revenue
with reference to the percentage of completion method. Australian Government Research Project income is recognised in
accordance with this standard. The stage of completion is measured by reference to total expenditure incurred to date compared
with the funding provided. The University regards the receipt of such income as a reciprocal transfer as the University is required to
provide the necessary services in return for grant funding. A liability is recognised in the Balance Sheet in respect of Research Project
Income which is unearned at the balance date. AASB 118 Revenue requires revenue to be recognised in the reporting periods in
which the services are rendered.
Fees and Charges
Fee for service revenue is recognised upon the delivery of the service. Where revenue of a reciprocal nature has been clearly
received in respect of programs or services to be delivered in the following year, such amounts are deferred and disclosed as revenue
in advance in accordance with AASB 118 Revenue.
Investment Income
Dividends are taken into income when the shares are declared ex dividend. Interest income is recognised on an accruals basis taking
into account the interest rates applicable to the financial assets.
Other
Income from the sale of goods is recognised upon the delivery of goods to customers.
Income in the form of endowments and bequests is brought to account as revenue when received.
All income is stated net of Goods and Services Tax (GST).
The University of Melbourne Annual Report 2007 101