Complete annual report 2010-11 - Land - NSW Government

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State Property Authority Notes to and Forming Part of the Financial Statements For the Year Ended 30 June 2011 (c) Statement of Compliance The financial statements and accompanying notes comply with Australian Accounting Standards (which include Australian Accounting Interpretations). There are a number of recently issued or amended Australian Accounting Standards and Interpretations which are not yet effective and have not been adopted for the reporting period ending 30 June 2011. Management has reviewed each of these Standards and Interpretations and considers that their early adoption will not have any material impact on the financial results of the State Property Authority. (d) Income Recognition (i) Operating Lease Income Operating lease income is recognised in accordance with AASB 117 "Leases". Lease income from operating leases where the Authority is the lessor is recognised as income in the Statement of Comprehensive Income on a straight-line basis over the lease term. Contingent rental income is recognised as income in the period in which it is earned. (ii) Finance Lease Income Finance lease income is recognised in accordance with AASB 117 "Leases". Lease income from finance leases where the Authority is the lessor is recognised as income in the Statement of Comprehensive Income over the lease period so as to allocate finance income over the lease term on a systematic and rational basis. This income allocation is based on a pattern reflecting a constant period return on the Authority’s net investment in the lease. The estimated unguaranteed residual value used in computing the Authority's gross investment in each lease is reviewed regularly. If there has been a reduction in the estimated unguaranteed residual value, the income allocation over the lease term is revised and any reduction in respect of amounts accrued is recognised immediately. Contingent rent from finance leases as lessor is recognised as income in the period in which it is earned. (iii) Fees for Services Revenue from the rendering of services is recognised when the service is provided or by reference to the stage of completion (based on labour hours incurred to date). (iv) Interest Income Revenue is recognised using the effective interest method as set out in AASB 139 "Financial Instruments: Recognition and Measurement". (v) Grants and Contributions Grants and contributions are recognised as income when the Authority obtains control over the assets comprising the grant or contribution, it is probable that the economic benefits will flow to the entity, and the amount of the grant or contribution can be measured reliably. Control is normally obtained upon the receipt of cash. (vi) Sale of Property, Plant and Equipment Revenue is recognised when the significant risks and rewards of ownership of the item of property, plant and equipment passes to the buyer and can be measured reliably. Specifically, with respect to property sales, the risks and rewards are considered passed to the buyer at the time of settlement of the contract. 26 State Property Authority
State Property Authority 2010-2011 Annual Report State Property Authority Notes to and Forming Part of the Financial Statements For the Year Ended 30 June 2011 (vii) Emerging Asset Income In accordance with TPP 06-08 "Accounting for Privately Financed Projects", the Opera House Car Park is an emerging asset which the Authority has a right to receive in 2043 under a privately financed infrastructure arrangement. The right is being recognised as revenue and added to the asset value over the term of the car park concession. Any periodic revaluations are accounted for in accordance with AASB 116 "Property Plant and Equipment". (e) Provisions Provisions are recognised when the Authority has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation as at the reporting date, taking into account the risks and uncertainties that surround the events and circumstances that affect the provision. Where the effect of the time value of money is material, the provision amount is calculated as the present value of the expenditure expected to be required to settle the obligation. The discount rate used in the calculation is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The rate does not reflect risks for which future cash flow estimates have been adjusted. (i) Personnel Services Provision The Authority receives personnel services from the Department of Finance and Services (DFS). The DFS is not a Special Purpose Service Entity and does not control the Authority under this arrangement (Note 1(a)). In accordance with NSW Treasury Circular 06-13 "Financial Reporting and Annual Reporting Requirements Arising from Employment Arrangements", a liability representing the total amount payable to the DFS is recognised as a provision in the Statement of Financial Position. As the Authority is not an employer, the disclosure requirements of AASB119 "Employee Benefits" in respect of employee benefits do not apply. However, for clarity and transparency, the Personnel Services Provision is disaggregated in the notes to the financial statements into its major components which include Annual Leave, Long Service Leave On-costs and Unfunded Superannuation (Note 11(a)). (ii) Land Remediation Provision Where the Authority has a legal or constructive obligation to remediate an asset such as land, a provision is recognised to reflect the net present value of the estimated future costs required to settle the Authority's remediation obligations (Note 11(b)). At the same time, where the Authority owns the underlying asset, the amount of the provision is capitalised and added to the cost of the asset. Periodic changes in the provision are accounted for in accordance with the requirements of AASB Interpretation 1 "Changes in Existing Decommissioning, Restoration and Similar Liabilities" and the revaluation model requirements of AASB 116 "Property, Plant and Equipment" for not-for-profit entities. The discount applied to recognise the time value of money is unwound over the life of the provision. Any incremental increase resulting from the unwinding of the discount is recognised under Finance Costs within the Net Surplus/Deficit in the reporting period in which it occurs. Other increases or decreases in the provision resulting from periodic changes to the estimated timing or amount of future remediation costs, or changes to the discount rate used, alter the revaluation increase or decrease previously recognised on the underlying asset. An increase in the provision is recognised in the Net Surplus/Deficit except to the extent that it reverses any Asset Revaluation Reserve balance in respect of the underlying class of assets. A decrease in the provision is credited to the Asset Revaluation Reserve except to the extent that it reverses any previous increase recognised in the Net Surplus/Deficit in respect the underlying class of assets. Any changes to the Asset Revaluation Reserve resulting from these provision increases or decreases are separately identified and disclosed within Other Comprehensive Income. 2010-2011 Annual Report 27
Page 1: State Property Authority new South
Page 4 and 5: n Letter of submission Bligh House
Page 6 and 7: n Our charter The State Property Au
Page 8 and 9: n Organisational outcomes and achie
Page 10 and 11: leasing staff generated substantial
Page 12 and 13: Other sustainability initiatives la
Page 14 and 15: n Financial performance 2010-11 Ove
Page 16 and 17: n 2010-11 Operating result operatin
Page 18 and 19: n Audited financial information Sta
Page 20 and 21: 18 State Property Authority
Page 22 and 23: State Property Authority Financial
Page 24 and 25: State Property Authority Statement
Page 26 and 27: State Property Authority Statement
Page 30 and 31: State Property Authority Notes to a
Page 60 and 61: n STATUTORY AND STATISTICAL INFORMA
Page 62 and 63: n Personnel policies and practices
Page 64 and 65: 1st qtr $’000 2nd qtr $’000 3rd
Page 66 and 67: A full list of publicly available G
Page 68 and 69: Table F: Timeliness Number of appli
Page 70 and 71: n Agency contacts Postal address: G
Page 72: THIS PAGE HAS INTENTIONALLY BEEN LE

Complete annual report 2010-11 - Land - NSW Government

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