Annual Report 10/11 - Campus Living Villages

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
A$’000
Campus Living Villages Annual Report 10/11
Campus Living Australia Trust
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives)
is determined using valuation techniques. The consolidated entity uses a variety of methods and makes assumptions that
are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar
instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are
used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as
the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using
forward exchange market rates at the balance sheet date.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the consolidated
entity for similar financial instruments.
n) Deferred expenses and other capitalised costs
New business and tender costs are deferred to the extent they can be separately identified, measured reliably and it is
probable that the consolidated entity will realise the economic benefits. Further, the costs are to be recoverable out of
future revenue and not relate to revenue which has already been brought into account and will contribute to the future
earning capacity of the consolidated entity.
Capitalised tender expenditure is transferred to property, plant and equipment in respect of owned sites and intangible
assets for management contracts.
Costs related to unsuccessful tenders are recognised as an expense in the period in which they are incurred.
o) Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. 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
Leasehold improvements
Leased plant and equipment
Furniture, fittings and equipment
Vehicles
25-40 years
25-35 years
10-15 years
3-8 years
3-5 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.
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