Annual Report - Campus Living Villages

Campus Living Villages Annual Report 09/10 6 3
Campus Living Australia Trust
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
A$’000
Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the consolidated entity and the cost
of the item can be measured reliably. The carrying amount
of any replaced part is derecognised. All other repairs and
maintenance are charged to the income statement during
the reporting period in which they are incurred. Land is not
depreciated. Depreciation on other assets is calculated using
the straight-line method to allocate their cost or revalued
amounts, net of their residual values, over their estimated
useful lives, as follows:
Buildings
Vehicles
Furniture, fittings and equipment
Leasehold improvements
Leased plant and equipment
25-40 years
3-5 years
3-8 years
25-35 years
10-15 years
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount. Gains and
losses on disposals are determined by comparing proceeds
with carrying amount. These are included in the Statement
of Comprehensive Income. When revalued assets are sold,
amounts included in other reserves in respect of those assets
are transferred to retained earnings.
p) Intangibles
Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the consolidated entity’s share of the
net identifiable assets of the acquired subsidiary/associate
at the date of acquisition. Goodwill is not amortised. Instead,
goodwill is tested for impairment annually or more frequently
if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment
losses. Gains and losses on the disposal of an entity include
the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose
of impairment testing.
Management contracts
Management contracts acquired as part of a business
combination are recognised separately from goodwill.
The management contracts are carried at their fair value at
the date of acquisition less accumulated amortisation and
impairment losses. Amortisation of management contracts is
calculated based on the timing of projected cash flows of the
contracts over their estimated useful lives, which currently
vary from 20 to 30 years.
q) Trade and other payables
These amounts represent liabilities for goods and services
provided to the consolidated entity prior to the end of
financial year which are unpaid. The amounts are unsecured
and are usually paid within 30 days of recognition. Deferred
revenue represents income received in advance from students
at the beginning of the semester and is released to revenue
when the recognition criteria have been met.
r) Borrowings and borrowing costs
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in the income statement over the period
of the borrowings using the effective interest method.
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a
financial liability that has been extinguished or transferred
to another party and the consideration paid, including
any noncash assets transferred or liabilities assumed, is
recognised in other income or other expenses.
Borrowings are classified as current liabilities unless the
consolidated entity has an unconditional right to defer
settlement of the liability for at least 12 months after the
balance sheet date. All borrowing costs incurred for the
construction of any qualifying asset are capitalised during
the period of time that is required to complete and prepare
the asset for its intended use or sale. Other borrowing costs
are expensed.
s) Provisions
Provisions for legal claims and employee benefits are
recognised when the consolidated entity has a present legal
or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to
any one item included in the same class of obligations may
be small.
Provisions are measured at the present value of
management’s best estimate of the expenditure required to
settle the present obligation at the balance sheet date. The
discount rate used to determine the present value reflects
current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision
due to the passage of time is recognised as interest expense.
CLAT