annual report/2006 - University of Melbourne

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Notes to and forming part of the Financial Statements (5) Subsidiaries (continued) - Melbourne Information Management Pty Ltd ACN 087 644 595* - UMEE UK Ltd (formerly Hawthorn Edinburgh Ltd) ** - Hawthorn English Language Centres (Canada) Ltd ** Melbourne Business School Ltd ACN 007 268 233 and its subsidiaries: - The Melbourne Business School Foundation - The Melbourne Business School Foundation Ltd ACN 057 776 711 - Mt Eliza Graduate School of Business and Government Limited ACN 008 394 732 - Melbourne Business School Building Fund Melbourne University Publishing Ltd ACN 103 214 713 Melbourne Ventures Pty Ltd ACN 106 845 783 and its subsidiary: - UM Commercialisation Pty Ltd ACN 122 930 269 MU Student Union Ltd ACN 107 286 706 The Meanjin Company Ltd ACN 005 097 325 The Victorian College of the Arts *** The Victorian Institute for Chemical Sciences Limited ACN 107 013 936 # * Not Operational during the year. ** On 31 May 2006, the business and assets of UMEE UK Ltd and Hawthorn English Language Centres (Canada) Ltd were sold. From 1 June 2006 the companies became non-operational. *** The Victorian College of the Arts (VCA) is a body politic and corporate established under the Victorian College of the Arts Act 1981. Under the current accounting standards, the University is deemed to have a reporting responsibility for the VCA which is treated as a subsidiary for consolidation purposes. On 15 November 2005, the VCA Council signed a Heads of Agreement with the University which has led to the establishment of VCA as a faculty of the University from 1 January 2007. On 29 August 2006 the Melbourne University (Victorian College of the Arts) Act 2006 was enacted. The Act dissolved the VCA and its Council and provided for the integration of the VCA as a Faculty within the University. On 1 January 2007, the University became the successor in law to the VCA and all assets and liabilities of the VCA were transferred to the University of Melbourne. Further details are included in Note 44 to the Financial Statements. # The Victorian Institute for Chemical Sciences Limited operates on a June financial year-end in order to align its reporting to the Department of Innovation, Industry and Regional Development. 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 where the University holds 45% of the voting rights. The Melbourne Business School Ltd is deemed to be a subsidiary 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. 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) Transactions and Balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. 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. 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 (2005 nil). 98 The University of Melbourne Annual Report 2006
financial statements/ Notes to and forming part of the Financial Statements Note 1 Statement of Significant Accounting Policies (Continued) 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. 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. (ii) 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. (iii) 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. (iv) 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). 1.5 Income Taxation The University of Melbourne and its subsidiaries, with the exception of Melbourne Ventures Pty Ltd and some of the wholly owned subsidiaries of UMEE Ltd, are exempt from income tax pursuant to Part 50.1 of the Income Tax Assessment Act 1997. The overseas subsidiaries of UMEE Ltd are subject to income tax in the relevant tax jurisdictions. Melbourne Ventures Pty Ltd and the wholly owned subsidiaries of UMEE Ltd adopt the balance sheet method of tax-effect accounting. 1.6 Cash and Cash Equivalents For the purpose of the Cash Flow Statement, cash and cash equivalents include cash on hand and at bank, at-call deposits and bank bills with a maturity of 90 days or less. 1.7 Inventories Annual stocktakes of inventories are undertaken at all locations. Inventories comprising Finished Goods, Raw Materials, Work in Progress, Fodder and Hay stocks are measured at the lower of cost and net realisable value, with adjustments made to take account of obsolescence. The Group’s livestock, orchards and picked fruit are measured at their fair value less estimated point-of-sale costs in accordance with AASB 141 Agriculture. The fair value of these items is determined based on market prices in the local area. Costs are assigned to individual items of inventory on the basis of the first-in, first-out method. 1.8 Financial Instruments AASB 139 Financial Instruments: Recognition and Measurement has four categories of financial instruments including: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. The classification of investments is determined by management at initial recognition and is re-evaluated at each reporting date. The University of Melbourne Annual Report 2006 99
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growing in the esteem of future gen
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Melbourne has set itself the diffic
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Letter to the Minister The Hon Jaci
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senior officers/ President, Academi
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highlights/ knowledge transfer/ •
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“ Melbourne has a great education
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introduction and overview/ Five-Yea
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introduction and overview/ its posi
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Table 1. Median undergraduate ENTER
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quality people/ High-Achieving Stud
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The strength of the University’s
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Our goal is to provide high-quality
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Melbourne has embraced ‘knowledge
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knowledge transfer/ The University
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