Annual Report 2007-08 - Plumbing Industry Commission

NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2008
1.9 Cash assets and cash equivalents
Cash assets comprise cash on hand, cash in banks, and term deposits which are readily convertible to cash.
1.10 Investments
Investments, generally comprised as amounts on deposit, are brought to account at cost. Interest revenue is recognised when the interest
is earned.
1.11 Receivables
Trade debtors are carried at amounts receivable. The collectability of debts is assessed on an ongoing basis and specific provision is made
for any doubtful accounts, where there is objective evidence that the debts will not be collected. Bad debts are written off when identified.
1.12 Financial assets
The Commission classifies its investments as held to maturity. The classification depends on the purpose for which the investments were
acquired. Management determines the classification of its investments at initial recognition. The Commission assesses at each balance
date whether the financial assets or group of financial assets are impaired.
Held to maturity investments
Where the Commission has the positive intent and ability to hold investments to maturity, they are stated at amortised cost less
impairment losses.
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset, or, where appropriate, a shorter period.
1.13 Inventories
Stocks on hand represent publications for re-sale and are stated at the lower of cost or net realisable value.
1.14 Property, plant and equipment
(a) Revaluations of non-current assets
Subsequent to initial recognition as assets, non-current physical assets, other than plant and equipment are measured at fair value. Plant
and equipment are measured at cost. Revaluations are made with sufficient regularity to ensure that the carrying amount of each asset
does not differ materially from its fair value at the reporting date.
Valuations of freehold land and buildings are based on independent valuations carried out by P I Cramer, FAPI, AREI based on current
market valuations. All freehold land and buildings were revalued as at 30 June 2006.
Revaluations by independent assessments are conducted at least every three years.
Revaluation increments are credited 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 net results, the increment is recognised immediately as
revenue in the net result.
Revaluation decrements are recognised as an expense unless there is an existing revaluation reserve in respect of that class of assets that
have been revalued. In those circumstances, the decrements are offset against the revaluation reserve.
(b) Acquisition of assets
The cost method of accounting is used for all acquisitions of assets. Cost is measured as the fair value of the assets given up or liabilities
undertaken at the date of acquisition plus incidental costs directly attributed to the acquisition.
It is the policy of the Commission to write off as current expenditure all items of a unit value less than $200.
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