4.78 MB - Perth Airport

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value
as at the date of acquisition. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing
could be obtained from an independent financier under comparable terms and conditions.
The lease franchise fee, arising from the acquisition of the Perth Airport lease, is brought to account on the basis described in note 1(k)(i).
(i)
Recoverable Amounts
The recoverable amount of an asset is the net amount expected to be recovered through the net cash inflows arising from its continued
use and subsequent disposal.
Where the carrying amount of a non-current asset is greater than its recoverable amount the asset is revalued to its recoverable amount.
The expected net cash flows included in determining recoverable amounts of non-current assets are discounted to their present values
using a market determined, risk adjusted discount rate.
(j)
Infrastructure, Plant and Equipment
(i) Cost and Valuation
The fair value basis is used to attribute value to land, buildings, infrastructure, plant and equipment. At each reporting date, the value
of each asset in these classes is reviewed to ensure that it does not differ materially from the asset’s fair value at that date. Where
necessary, the asset is revalued to reflect its fair value.
Where assets have been revalued, the potential effect of the capital gains tax on disposal has not been taken into account in the
determination of the revalued carrying amount unless it is expected that a liability for such tax will crystallise.
(ii) Depreciation and Amortisation
Infrastructure, plant and equipment (including infrastructure assets under lease) have been depreciated using the straight-line method
based upon the estimated useful life of the assets. Depreciation rates for the 2004/2005 financial year have been amended to reflect
the remaining useful life of assets as assessed by independent valuers as part of their valuation of assets as at 30 June 2004.
Depreciation and amortisation rates used are as follows:
2005 2004
Operational Land 1.09% 1.01%
Investment Land 0.00% 0.00%
Plant and Equipment 5.00 – 33.00% 15.00%
Buildings 2.50 – 15.00% 6.25 – 15.00%
Fixed Plant and Equipment 5.00 – 15.00% 5.00 – 15.00%
Runways, Taxiways and Aprons 1.01 – 6.67% 1.01 – 6.67%
Other Infrastructure Assets 2.50 – 20.00% 6.25 – 20.00%
(iii) Leasehold Improvements
Leasehold improvements have been amortised over the shorter of the unexpired period of the lease and estimated useful life of the
improvements.
(iv) Major Repairs and Maintenance
Major asset maintenance costs incurred on runways, taxiways and aprons are capitalised and are written off over the period between
major asset maintenance projects. This recognises that the benefit is to future periods and also apportions the cost over the period of
the related benefit.
(v) Non-Current Assets under Construction
The cost of non-current assets constructed by the consolidated entity includes the cost of materials used in construction, direct labour
on the project and consultancy and professional fees associated with the project.
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