annual report 2011

IOOF | annual report 2011
Notes to the financial statements (cont’d)
For the year ended 30 June 2011
(v) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares and share
options are shown in equity as a deduction, net of any tax
effects.
Repurchase, disposal and reissue of share capital
(treasury shares)
When share capital recognised as equity is repurchased, the
amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognised as a
deduction from equity. Repurchased shares are classified as
treasury shares and are presented as a deduction from total
equity. When treasury shares are sold or reissued subsequently,
the amount received is recognised as an increase in equity, and
the resulting surplus or deficit on the transaction is transferred
to/from retained earnings.
(e) Property and equipment
(i)
Recognition and measurement
Property and equipment are measured at cost less any
accumulated depreciation and any accumulated impairment
losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset.
The gain or loss on disposal of an item of property and
equipment is determined by comparing the proceeds from
disposal with the carrying amount of the property and
equipment and is recognised net within other income/other
expenses in profit or loss. When revalued assets are sold,
any related amount included in the revaluation reserve is
transferred to retained earnings.
(ii)
Subsequent costs
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 Group and the cost of the item can be
measured reliably. Repairs and maintenance costs are charged
to profit or loss during the financial period in which they are
incurred.
(iii) Depreciation
Depreciation is based on the cost of the asset less its residual
value. Significant components of individual assets are assessed
and if a component has a useful life that is different from
the remainder of that asset, that component is depreciated
separately.
Depreciation is recognised in profit or loss on a straight-line
basis over the estimated useful lives of each component
of an item of property and equipment. Leased assets are
depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain
ownership by the end of the lease term.
The estimated useful lives for the current and comparative year
are as follows:
• office equipment 3-10 years
• leasehold improvements 3-10 years
• equipment under finance lease 3-10 years
Depreciation methods, useful lives and residual values are
reviewed at each reporting date, and adjusted if appropriate.
(f)
(i)
Intangible assets
Goodwill
For the measurement of goodwill at initial recognition, see
note 3(a)(i) Business combinations.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment
losses. In respect of equity-accounted investees, the carrying
amount of goodwill is included in the carrying amount the
investment, and impairment loss on such investment is not
allocated to any asset, including goodwill, that forms part of
the carrying amount of the equity accounted investee.
(ii)
Other intangible assets
Other intangible assets that are acquired by the Group and
have finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases
the future economic benefits embodied in the specific asset to
which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognised in
profit or loss as incurred.
(iv) Amortisation
Amortisation is based on the cost of an asset less its residual
value.
Amortisation is recognised in profit or loss on a straight-line
basis over the estimated useful lives of intangible assets, other
than goodwill, from the date that they are available for use.
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