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

FINANCIAL
STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Purchases and sales of investments are recognised on the trade date, the date on which the Group commits to purchase or sell the
asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through
profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have
been transferred and the Group has transferred substantially all the risks and rewards of ownership.
1.10 Other Financial Assets
Investments in other entities are in the main carried at fair value. Where a fair value is not readily available, investments are carried at the
lower of cost or recoverable amount.
1.11 Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and
impairment losses.
The University has a policy of capitalising property, plant and equipment costing $10,000 or more. Items under $10,000 are expensed.
Some subsidiaries have lower capitalisation thresholds. The overall effect of these is considered to be immaterial in accordance with AASB
1031 Materiality. There has been no change to the capitalisation rate from the prior year.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Land and Buildings
Land and Buildings are recorded in the Balance Sheet at fair value at either:
Cost
On initial recognition Land and Buildings are measured at cost. Capital expenditure on refurbishment of buildings which adds to their
value rather than maintaining their value is recorded in the Balance Sheet at cost.
Independent Valuation
Subsequent to initial recognition, Land and Buildings are valued by an external valuer on a cyclical basis unless there is a material movement
between valuations. These assets are disclosed as measured at fair value. At the date of revaluation any accumulated depreciation is
eliminated against the gross carrying amount of the asset. The net value is then restated to the revalued amount of the asset.
An independent valuation of Land and Buildings belonging to the University, Victorian College of the Arts and Melbourne Business
School Ltd was carried out as at 31 December 2006 by Cunningham Property Consultants Pty Ltd. Properties held by the Victorian
College of the Arts were transferred to the University on integration at fair value.
A Director’s valuation of Land and Buildings belonging to UMEE Ltd was carried out as at 31 December 2006 by the directors of the
company.
The current value of Land and Buildings are disclosed in Note 25. The amount of revaluation is disclosed in Note 31.
Library Collection
The University’s general collection which excludes the rare book collection is recorded at cost less any accumulated depreciation and
where applicable, any impairment losses.
Other Collections
Other collections include the University’s Rare Book Collection, Archives and the Percy Grainger Collection. Other Collections are
measured on a fair value basis and are valued on cyclical basis unless there is a material movement between valuations. Collections
are valued by management relying on both internal and independent valuations.
A valuation of Other Collections was carried out as at 31 December 2006. Valuations were undertaken by management based on
both internal and independent expertise provided by Leonard Joel Australia (Valuers) and Kenneth Hince Old and Fine Books.
Works of Art
The University’s Art Collection is measured on a fair value basis and is valued on a cyclical basis unless there is a material movement
between valuations. Collections are valued by management relying on both internal and independent valuations.
A valuation of Works of Art held by the University was carried out as at 31 December 2006. Valuations were undertaken by
management based on both internal and independent expertise provided by Leonard Joel Australia (Valuers), Deutcher-Menzies Pty
Ltd, Joshua McClelland and Jan Martin.
An independent valuation of Works of Art held by the Victorian College of the Arts was carried out as at 31 December 2006 by
Leonard Joel Australia (Valuers). Works of Art held by the Victorian College of the Arts were transferred to the University on
integration at fair value.
The amount of revaluation is disclosed in Note 31.
Items of Cultural Significance
The University has identified and is in the process of cataloguing items of cultural significance. These items are varied in nature.
Apart from Other Collections and Works of Art (referred to above) these collections have not been valued as there is no ready market
or reliable valuation basis for these items.
Motor Vehicles
Recorded in the Balance Sheet at cost less depreciation and where applicable, any impairment losses. Gains or losses in respect of
the sale or trade-in of motor vehicles are included in Notes 16 and 25.
Furniture and Equipment
Recorded in the Balance Sheet at cost less depreciation and where applicable, any impairment losses. Gains or losses in respect of
disposals are included in Notes 16 and 25.
The University of Melbourne Annual Report 2007 103