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

NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(viii) Leasehold Improvements
Recorded in the Balance Sheet at cost less amortisation and where applicable, any impairment losses. Improvements costing
$10,000 or more are capitalised with expenditure less than $10,000 being expensed.
(ix)
(x)
(xi)
Construction in Progress
Recorded in the Balance Sheet at cost.
Subsequent Costs
The costs of the day-to-day servicing of property, plant and equipment are recognised in the Income Statement in the period in which
they are incurred.
Depreciation
Depreciation is provided on a straight line basis on all tangible fixed assets other than Land, Construction in Progress, Works of Art
and Other Collections none of which are depreciated.
Major Depreciation Rates are:
Buildings 3%
Motor Vehicles 20%
Furniture and Equipment
- Furniture, Fixtures and Fittings 10%
- Communications Equipment 12½%
- General Equipment 25%
- Scientific and Computing Equipment
- Large Research Equipment 20%
- Other Scientific and Computing Equipment 33 %
Leasehold Improvements (amortised over the term of the lease)
Library Collection:
- Monographs 2½%
- Periodicals 2%
These rates have been consistently maintained and there has been no change from rates applied in prior years with exception to
Large Research Equipment as disclosed in Note 1.25. Depreciation rates used by some subsidiaries vary slightly from the rates
stated above.
Acquisitions are depreciated from the date of purchase; disposals are depreciated up to the date of sale or when classified as heldfor-sale
(refer to Note 1.15).
1.12 Intangible Assets
(i) Research
Expenditure on research activities is recognised in the Income Statement as an expense when it is incurred.
(ii) Goodwill
Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the acquirer’s interest
in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at
cost less any accumulated impairment losses. At 31 December 2007, the consolidated entity had no goodwill (2006, Nil).
(iii)
Software
Major computer software is recorded in the Balance Sheet at cost less amortisation and where applicable, any impairment losses.
Only the cost of the software is capitalised, installation costs are expensed in the Income Statement in the year they are incurred.
Amortisation is provided on a straight line basis at the rate of 33 %. There has been no change in the amortisation rate from the
prior year.
1.13 Revaluation of Non Current Assets
AASB 116 Property, Plant and Equipment requires reporting entities to measure assets within each class of non-current asset on either the
cost basis or on a fair value basis. Subsequent to initial recognition, non-current physical assets, other than furniture and equipment, motor
vehicles, leasehold improvements, the library collection and intangible assets, are measured at fair value.
In accordance with the not-for-profit requirements of AASB 116, revaluation increments are credited directly to the asset revaluation
reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously
recognised as an expense in the net result, the increment is recognised as income in the net result.
Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in
the asset revaluation reserve in respect of the same class of assets, they are debited directly to the asset revaluation reserve.
Revaluation increments and decrements relating to individual assets within a class of property, plant and equipment are offset against one
another within that class but are not offset in respect of assets in different classes. Revaluation reserves are not transferred to retained
earnings on derecognition of the relevant asset.