Education

2.13
Assets
Assets are recognised in the Statement of Financial
Position where it is probable that the future economic
benefits will flow to the department and the asset has a
cost or a value that can be measured reliably.
a) Cash and deposits
Cash means notes, coins and deposits held at call with
a bank or financial institution, for the department and
schools, as well as funds held in the Special Deposits and
Trust Fund. Deposits are recognised at amortised cost
being their face value.
b) Receivables
Receivables are recognised at amortised cost, less any
impairment losses, however, due to the short settlement
period, receivables are not discounted back to their
present value.
c) Assets held for sale
Assets held for sale (or disposal groups compromising
assets and liabilities) that are expected to be recovered
primarily through sale rather than continuing use are
classified as held for sale. Immediately before classification
as held for sale, the assets (or components of a
disposal group) are remeasured in accordance with the
department’s accounting policies. Thereafter the assets
(or disposal group) are measured at the lower of carrying
amount and fair value less costs to sell.
d) Property, plant, equipment, infrastructure,
library book stock and heritage
(i) Valuation basis
Land, buildings, infrastructure, and heritage assets and
other long-lived assets are recorded at fair value less
accumulated depreciation. All other non-current physical
assets, including work in progress, are recorded at historic
cost less accumulated depreciation and accumulated
impairment losses.
In determining the fair value of land, reference is made
to the best available market evidence of the price of the
same or similar asset, evidence is drawn from sale of
nearby land where available.
In determining the fair value of buildings and infrastructure
assets, a determination is made whether the asset is of
a specialised nature or openly traded in the market. The
majority of the department’s building and infrastructure
assets are of a specialised nature, i.e. school buildings.
The fair value of the department’s specialised buildings
and infrastructure is estimated by the sum of current
market prices for one or more transactions required
to reproduce or replace the assets with the modern
equivalent, less accumulated depreciation. As part of
calculating an asset’s depreciation a ‘utility’ factor has
been applied which factors in the current spare capacity.
For non-specialised building and infrastructure assets the
fair value is derived from market evidence on a direct
comparison basis.
Heritage assets with an intrinsic value are valued with
reference to sales of identical or similar assets, evidenced
in an open and transparent market place. Assets for
which a buying price is readily accessible are valued at this
replacement cost.
All other non-current physical assets, including work in
progress, are recorded at historic cost less accumulated
depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to
the acquisition of the asset. The costs of self-constructed
assets includes the cost of materials and direct labour,
any other costs directly attributable to bringing the asset
to a working condition for its intended use, and the costs
of dismantling and removing the items and restoring the
site on which they are located. Purchased software that is
integral to the functioning ability of the related equipment
is capitalised as part of that equipment.
When parts of an item of property, plant and equipment
have different useful lives, they are accounted for as
separate items (major components) of property, plant
and equipment.
(ii) Subsequent costs
The cost of replacing part of an item of property,
plant and equipment is recognised in the carrying amount
of the item if it is probable that future economic benefits
embodied within the part will flow to the department and
its costs can be measured reliably. The carrying amount of
the replaced part is derecognised. The costs of day-to-day
servicing of property, plant and equipment are recognised
in profit or loss as incurred.
(iii) Asset recognition threshold
The asset capitalisation threshold adopted by the
department is $150,000 for intangible assets and
major capital works, and $10,000 for all other assets.
Assets valued at less than these thresholds are charged to
the Statement of Comprehensive Income in the year of
purchase (other than where they form part of a group of
similar items which are material in total).
(iv) Revaluations
The department revalues applicable assets on a program
of five years. In accordance, with AASB 116 Property,
Plant and Equipment, in years between valuations,
indices supplied by qualified valuers are used to establish
fair value.
Assets are grouped on the basis of having a similar nature
or function in the operations of the department.
e) Other assets
The department recognises some other small assets
such as prepayments of expenditure and GST input tax
credits received.
f) Intangibles
Intangible assets held by the department are valued at fair
value less any subsequent accumulated amortisation and
any subsequent impairment losses where an active market
exists. Where no active market exists, intangibles are
valued at cost less any accumulated amortisation and any
accumulated impairment losses.
116 Financial Statements » Notes