Annual Report 2011 - 2012 - Yarriambiack Council

A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite service hasnot been provided at balance date.User fees and finesUser fees and fines are recognised as revenue when the service has been provided, the payment is received, orwhen the penalty has been applied, whichever first occurs.NOTES TO THE FINANCIAL REPORTFor the Year Ended 30 June 2012A provision for doubtful debts is recognised when collection in full is no longer probable.Sale of property, plant and equipment, infrastructureThe profit or loss on sale of an asset is determined when control of the asset has irrevocably passed to the buyer.NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Trade and other receivablesReceivables are carried at amortised cost using the effective interest rate method. A provision for doubtful debtsis recognised when there is objective evidence that an impairment loss has occurred.RentalRents are recognised as revenue when the payment is due or the payment is received, whichever first occurs.Rental; payments received in advance are recognised as a prepayment until they are due.InterestInterest is recognised progressively as it is earned.(c)InventoriesInventories held for distribution are measured at cost adjusted when applicable for any loss of service potential.Other inventories are measured at the lower of cost and net realisable value.(d)Depreciation and amortisation of property, plant and equipment, infrastructure, intangiblesBuildings, land improvements, plant and equipment, infrastructure, heritage assets, and other assets havinglimited useful lives are systematically depreciated over their useful lives to the Council in a manner which reflectsconsumption of the service potential embodied in those assets. Estimates of remaining useful lives and residualvalues are made on a regular basis with major asset classes reassessed annually. Depreciation rates and methodsare reviewed annually.Where assets have separate identifiable components that are subject to regular replacement, these componentsare assigned distinct useful lives and residual values and a separate depreciation rate is determined for eachcomponent.Road earthworks are not depreciated on the basis that theya re assessed as not having a limited useful life.Straight line depreciation is charged based on the residual useful life as determined each year.Yarriambiack Shire Council Annual Report 2011-2012 43