LEGAL SERVICES COMMISSIONER ANNUAL REPORT 2012

1 Summary of significant accounting policies CONTINUEDDepreciation andamortisation expenseAll plant and equipment and othernon-financial physical assets that havefinite useful lives are depreciated.Depreciation is generally calculatedon a straight-line basis, at rates thatallocate the asset’s value, less anyestimated residual value, over itsestimated useful life.The estimated useful lives, residualvalues and depreciation method arereviewed at the end of each annualreporting period, and adjustmentsmade where appropriate.The following are typical estimateduseful lives for the different assetclasses for current and prior years:The LSC recharges staff salaries andon costs to the LSB for those staffundertaking LSB functions.(g) Other economic flows includedin the net resultOther economic flows measure thechange in volume or value of assetsor liabilities that do not result fromtransactions.2012 2011Motor vehicles 3 years 3 yearsOffice equipment 5 to 10 years 5 to 10 yearsOffice furniture 5 to 10 years 5 to 10 yearsComputer equipment 3 to 5 years 3 to 5 yearsIntangible assets 5 years 5 yearsIntangible produced assets withfinite useful lives are depreciated asan expense from transactions on asystematic (typically straight-line)basis over the asset’s useful life.Depreciation begins when the asset isavailable for use, that is, when it is inthe location and condition necessaryfor it to be capable of operating in themanner intended by management.Supplies and servicesSupplies and services are recognisedas an expense in the reporting periodin which they are incurred.Other operating expensesOther operating expenses generallyrepresent the day-to-day running costsincurred in normal operations.Bad and doubtful debtsRefer to Note 1(i) Impairment offinancial assets.Recharge of servicesThe LSB to the LSCExpenses directly incurred by the LSBfor occupancy, depreciation and otherrelevant operating costs have beenproportioned before being expensedand are charged directly to the LSBand the LSC. The LSC are charged itsportion of overhead costs.The LSC to the LSBUnder section 6.4.1 of the LegalProfession Act 2004, staff supportingthe activities of the LSB are classifiedas employees of the LSC, who employsall staff under Part 3 of the PublicAdministration Act 2004.Net gain/(loss) on non-financial assetsNet gain/(loss) on non-financialassets and liabilities includes realisedand unrealised gains and losses asfollows:Disposal of non-financial assetsAny gain or loss on the disposal ofnon-financial assets is recognised atthe date of disposal and is determinedafter deducting from the proceeds thecarrying value of the asset at that time.Impairment of non-financial assetsIntangible assets with indefinite usefullives (and intangible assets not yetavailable for use) are tested annuallyfor impairment (as described below)and whenever there is an indicationthat the asset may be impaired.All other assets are assessed annuallyfor indications of impairment.If there is an indication of impairment,the assets concerned are tested as towhether their carrying value exceedstheir recoverable amount. Where anasset’s carrying value exceeds itsrecoverable amount, the difference iswritten off as an other economic flow,except to the extent that the writedowncan be debited to an assetrevaluation surplus amount applicableto that class of asset.If there is an indication that there hasbeen a change in the estimate of anasset’s recoverable amount since thelast impairment loss was recognised,the carrying amount shall be increasedto its recoverable amount. Thisreversal of the impairment loss occursonly to the extent that the asset’scarrying amount does not exceed thecarrying amount that would have beendetermined, net of depreciation oramortisation, if no impairment loss hadbeen recognised in prior years.52 Legal Services COMMISSIONER Annual Report 2012