Annual Report 2011 - Industry Training Federation

Depreciation is provided on leasehold improvements, computersand software, office furniture and equipment and motor vehicles.Depreciation is recognised in the Statement of ComprehensiveIncome to write off the cost of an item of property, plant andequipment, less any residual value, over its expected useful life, atthe following rates:• Plant and equipment: 30% - 50% Diminishing value• Office furniture and equipment: 3% - 24% Diminishing valueDepreciation methods, useful lives and residual values arereviewed at each reporting date.4.9 Income TaxITF is a registered charity and is therefore exempt from income tax.4.10 Intangible assetsIntangible assets include acquired and internally developedsoftware used in administration. They are accounted for usingthe cost model whereby capitalised costs are amortised on adiminishing value basis over their estimated useful lives, as theseassets are considered finite. Residual values and useful lives arereviewed at each reporting date. In addition, they are subject toimpairment testing. The rates applied are 48%.• Software:3-5 yearsSubsequent expenditure is capitalised only when it increases thefuture economic benefits embodied in the specific asset to whichit relates. All other expenditure is recognised in profit or loss whenincurred.4.11 Short-term employee benefitsShort-term employee benefits, including holiday entitlementand sick leave, are current liabilities included in trade and otherpayables, measured at the undiscounted amount that the ITFexpects to pay as a result of the unused entitlement.4.12 Equity and reservesRetained earnings include all current and prior period retainedprofits.17Industry Training Federation Annual Report 2011