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)(i)Valuation of Intangible AssetsDue to the difficulty in measuring the future realisable benefit arising from intangible assets, only purchased intangibles arerecognised at historical cost. Proceeds arising from the disposal of internally generated intangible assets are brought toaccount in the Statement of Financial Performance in the period in which the transaction occurs.(i)(ii)On acquisition of controlled entities, the excess of the fair value of the purchase consideration over the fair value ofidentifiable net assets acquired is recognised as goodwill. Purchased goodwill is amortised on a straight line basis overfive years, being the period to which the majority of benefits are expected to be derived.Any patents held by the University are expensed during the period in which the patents are registered by the University.(j)Leased AssetsFinance lease liabilities are allocated between current and non-current components in the Statement of Financial Position.Equal instalments of the operating lease payments are charged to the Statement of Financial Performance over the lease termas this is representative of the pattern of benefits to be derived from the leased property.(k)Recoverable Amount of Non-current AssetsWhere the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to itsrecoverable amount. The decrement in the carrying amount is recognised as an expense in the net operating result in thereporting period in which the recoverable amount write-down occurs.(l)InventoriesInventories are valued at the lower of cost and net realisable value. Cost is assigned on a first-in first-out basis. Materialspurchased by Schools (equivalent) have been treated as expenditure in the accounts at the time of purchase.(m)Depreciation and Amortisation of Non-current AssetsThe depreciation rate policy is as follows:Asset Class• Leasehold Land• Freehold Land• Buildings• Leasehold Improvements• Computer Hardware• Computer Software• Other Equipment and Furniture• Motor Vehicles• Artworks• Special Collections• Library Books• Intangible AssetsDepreciation RateNot depreciatedNot depreciated2 per cent reducing balanceDepreciate over the term of the lease or estimated useful life of the improvement25 per cent straight line10 per cent straight line12.5 per cent straight line17.5 per cent straight line if held more than one yearNot depreciatedNot depreciatedDepreciated 100 per cent in the fourth year after acquisition20 per cent straight lineProfits and losses on disposal of non-current assets are included in the net operating result as recorded in the Statement ofFinancial Performance.(n)ReservesReserves are created and are retained for funding of specified items and/or initiatives in future years.(o)Employee Benefits(i)Wages, Salaries and Annual LeaveLiabilities for wages, salaries and annual leave are recognised and are measured as the amount unpaid at the reportingdate at expected nominal value in respect of employees’ services up to that date.50