annual report/2006 - University of Melbourne

financial statements/
Notes to and forming part of the Financial Statements
Note 1 Statement of Significant Accounting Policies (Continued)
1.14 Non-Current Assets (or Disposal Groups) Held for Sale and Discontinued Operations
In the event that the Group identified a non-current asset (or disposal group) to be classified as held for sale, the asset (or
disposal group) would be stated at the lower of the carrying amount and fair value less costs to sell, if the carrying amount will
be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only
when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition.
An impairment loss is recognised for any initial or subsequent write down of the asset (or disposal group) to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but
not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of
the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified
as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue
to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented
separately from other liabilities in the Balance Sheet.
In June 2005 the University Council decided that it would cease the delivery of Vocational Education and Training (VET)
programs. This involves the progressive withdrawal from the delivery of agriculture-related education on the campuses at
Gilbert Chandler, Longerenong, Glenormiston and McMillan. The closure of these campus operations does not meet the
definition of a discontinued operation under AASB 5 Non-current Assets Held for Sale and Discontinued Operations as the
campuses are not considered to be a separate major line of business of the University. Land and Buildings associated with the
campuses were impaired as it is likely that they will be returned to the State Government free of charge.
1.15 Employee Benefits
Provision is made for the liability for employee benefits arising from services rendered by employees at the reporting date.
Employee benefits which are short term in nature and are expected to be settled within one year have been measured at the
amounts expected to be paid when the liability is settled, plus related on costs. Employee benefits payable later than one year
and which are long term in nature have been measured at the present value of the estimated future cash outflows to be made
for those benefits.
(i) Recreation Leave
Liabilities for recreation leave have been determined in accordance with Australian Accounting Standard AASB 119
Employee Benefits. The liability is broken down into the amount expected to be settled within twelve months of the
reporting date and that which is expected to be settled after 12 months of the reporting date.
(ii) Long Service Leave
Liabilities for long service leave are measured using the projected unit credit method which measures the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date. The current
portion of the liability is the amount expected to be settled within 12 months of the reporting date plus the amount over
which the University does not have a right of deferral.
(iii) Superannuation
Employee contributory superannuation funds managed outside of the University exist to provide benefits for the Group’s
employees and their dependents on retirement, disability or death of the employee. The contributions made to these funds
are recorded in the Income Statement. Further details are provided in Note 36.
(iv) Unfunded Superannuation Liabilities
In accordance with the 1998 instructions issued by the Department of Education, Training and Youth Affairs (DETYA), now
known as the Department of Education, Science and Training (DEST), the effects of the unfunded superannuation liabilities
of the University and its subsidiary, the Victorian College of the Arts, were recorded in the Income Statement and the
Balance Sheet for the first time in 1998. Prior to this date, the practice had been to disclose the liabilities by way of a note
to the financial statements.
The unfunded liabilities recorded in the Balance Sheet under Provisions have been determined by the actuary of the
Victorian Government Superannuation Office and relate to employees who transferred to the University from the
former Melbourne College of Advanced Education (merged with the University on 1 January 1989) Hawthorn Institute
of Education Ltd (merged with the University on 1 January 1997), the Victorian College of Agriculture and Horticulture
Ltd (merged with the University on 1 July 1997) and the Victorian College of the Arts, who are members of the State
Superannuation Scheme.
The University of Melbourne Annual Report 2006
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