Long Term Community Plan 2012-2022 - Hurunui District Council

www.hurunui.govt.nz
D Perry and peer reviewed by M Clough, Registered Valuer of
Beca Valuations Limited. Additions and disposals since the date
of valuation have been recorded at cost.
Certain infrastructural assets have been vested in HDC as part
of the subdivision consent process. Vested infrastructure assets
have been valued based on the estimated quantities of the
components vested in HDC.
Depreciation
Depreciation is provided on a straight line basis on all property,
plant and equipment and intangible assets other than land
and heritage assets, at rates which will write off the cost (or
valuation) of the assets to their estimated residual values over
their useful lives. Depreciation of these assets commences when
the assets are ready for their intended use.
Depreciation on revalued assets is charged to the statement of
comprehensive income. On the subsequent sale or retirement
of a revalued asset, the attributable revaluation surplus remaining
in the properties revaluation reserve is transferred directly to
retained earnings.
The gain or loss arising on the disposal or retirement of an asset
is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in the
statement of comprehensive income.
The useful lives and associated depreciation rates of major
classes of assets have been estimated in Table 1.
Intangible Assets
Software Acquisition and Development
Acquired computer software licenses are capitalised on the
basis of the costs incurred to acquire and bring to use the
specific software.
Costs associated with maintaining computer software are
recognised as an expense when incurred. Costs that are directly
associated with the development of software for internal use
by the Group are recognised as an intangible asset. Direct
costs include the software development employee costs and an
appropriate portion of the relevant overheads.
Amortisation
The carrying value of intangible assets with a finite life is amortised
on a straight-line basis over its useful life. Amortisation begins
when the asset is available for use and ceases at the date that
the asset is derecognised. The amortisation charge for each
period is recognised in the statement of comprehensive income.
The useful lives and associated amortisation rates of major
classes of intangible assets have been estimated as follows:
Computer software 3 – 4 years 25 – 33%
Aerial Photos 10 years 10%
Forestry Assets
Forestry and other biological assets are stated at fair value less
estimated point-of-sale costs, with any resultant gain or loss
recognised in the statement of comprehensive income. Pointof-sale
costs include all costs that would be necessary to sell
the assets, excluding costs necessary to transport the assets to
market.
The fair value of standing timber older than 10 years, being the
age at which it becomes marketable, is based on the market
price of the estimated recoverable wood volumes, net of
harvesting costs. The fair value of younger standing timber is
based on the present value of the net cash flows expected to
be generated by the plantation at maturity. The present values
are calculated using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset.
Forests are valued annually by Laurie Forestry Ltd. Any increase
or decrease in the valuation is reflected in the statement of
comprehensive income.
Impairment of Non-Financial Assets
At each reporting date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment
loss. If any such indication exists and for indefinite life intangibles,
the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where it is
not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash
generating unit to which the asset belongs. Recoverable amount
is the greater of market value less costs to sell and value in use.
The Group measures the value in use of assets whose future
economic benefits are not directly related to their ability to
generate net cash inflows held, at depreciated replacement cost.
In assessing value in use for other assets, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount.
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