Untitled - Annual Report 2004 - The University of Western Australia

THE UNIVERSITY OF WESTERN AUSTRALIANotes to the Financial Statementsfor the year ended 31 December 20041. Statement of Accounting Policies (continued)(g)Valuation of InvestmentsThe University’s investments are allocated into two investment pools, depending on the nature of the funds. Bequests, staffbenefit funds, capital reserves and other funds of a long-term nature are maintained within the long-term investment pool,while operating funds, research funds and other funds that require stability of income or shorter term cash requirements aremaintained within the short-term pool.Land and buildings within the investment portfolio are recorded at cost or donated value with the estimated market value atthe reporting date noted within the financial statements. Other investments which form part of the University’s investmentportfolio are valued at the market value applicable at reporting date. Unrealised gains or losses arising from changes in netmarket value are brought to account in the Statement of Financial Performance in the period in which they occur.Non-current investments are investments that have a maturity date in excess of one year or where the University plans to holdthe investment (or a similar replacement investment) for more than one year.(h)Valuation of Property, Plant and EquipmentSpecific non-current asset classes are subject to revaluation from time to time as shown in the financial statements.Revaluations are made with increments taken to asset revaluation reserves and decrements offset against previousincrements (if any) relating to the same class of assets. The balance (if any) is charged against the operating result as recordedin the Statement of Financial Performance.The consolidated entity has adopted Australian Accounting Standard AASB 1041 ‘Revaluation of Non-Current Assets’. Underthe transitional provisions of this standard, the following has been applied:• Artworks and Special Collections are measured on a fair value basis. It is considered that the value of each asset in theseclasses at the reporting date does not differ materially from the asset’s fair value at that date.• All Land and Buildings have been revalued to fair value as at 1 January 2004. It is considered that the value of each assetin these classes at the reporting date does not differ materially from the asset’s fair value at that date.• All other classes of property, plant and equipment are measured at cost.The valuation methodology employed for each asset class is:(i)(ii)(iii)(iv)(v)(vi)(vii)Freehold and leasehold land were independently valued during 2004 by Australian Valuation Partners based on the fairvalue of the land. Any subsequent acquisitions are recorded at cost until the next valuation.Institutional buildings were independently valued during 2004 by Australian Valuation Partners based on the fair value ofthe building. Any subsequent costs associated with the construction of completed buildings, alterations and/or thepurchase of buildings are recorded at cost until the next valuation.Work in progress on buildings represents the cost associated with the construction of buildings which have not reachedtheir date of practical completion and capitalised pre-acquisition costs on land and building acquisitions in progress.The University has not incurred any borrowing costs in relation to construction of buildings.Computer hardware, computer software, leasehold improvements, motor vehicles and other equipment and furniturecosting $5,000 or more are recorded at historical cost.Artwork was independently valued at market value by J. M. Lewis, Director of the Lister Calder Gallery (Christies’Western Australian Representative) and N. M. Ohrt, Managing Director of Perth Galleries Pty Ltd (Sotheby’s WesternAustralian Representative) during 2001. Any subsequent acquisitions are recorded at cost until the next valuation.As at 31 December 2004 a new category of property, plant and equipment was established being Special Collections.Within this category are all artefacts held by the Berndt Museum of Anthropology (previously disclosed within Artworks),special book collections (previously disclosed within Library Books) and the special music collection. Artefacts werevalued at market value by the Director and Curator of the Berndt Museum of Anthropology during 2001 and recognisedduring the 2003 year. Any subsequent artefact acquisitions and other assets within the class are recorded at cost.Library books are recorded at historical cost.Continued overleaf49