AnnuAl REPORT 2011-2012 - Sbs

NOTES TO THE FINANCIAL STATEMENTS
(p) Acquisition of assets
Assets are recorded at cost on acquisition except as
stated below. The cost of acquisition includes the fair
value of assets transferred in exchange and liabilities
undertaken. Financial assets are initially measured at
their fair value plus transaction costs where appropriate.
Assets acquired at no cost, or for nominal consideration,
are initially recognised as assets and income at their fair
value at the date of acquisition.
(q) property, plant and equipment
Asset recognition threshold
Purchases of property, infrastructure, plant and equipment
are recognised initially at cost in the balance sheet.
Purchases costing less than $2,000 are expensed in the
year of acquisition except where they form part of a project
or group of similar items, which are significant in total.
Following initial recognition at cost, property, plant and
equipment are carried at fair value less subsequent
accumulated depreciation and accumulated impairment
losses. Valuations are conducted with sufficient frequency
to ensure that the carrying amounts of assets do not differ
materially from the assets’ fair values as at the reporting
date. The regularity of independent valuations depends
upon the volatility of movements in market values for the
relevant assets.
Revaluations
Revaluation adjustments are made on a class basis.
Any revaluation increment is credited to equity under
the heading of asset revaluation reserve except to the
extent that it reverses a previous revaluation decrement
of the same asset class that was previously recognised
in the surplus/deficit. Revaluation decrements for a class
of assets are recognised directly in the surplus/deficit
except to the extent that they reverse previous revaluation
increment for that class.
Makegood under revaluation model
Changes in makegood provisions under the revaluation
model are the reverse of revaluations of the related asset,
the only difference being the account affected (asset or
provision). A decrease in the provision for makegood
(similar to a revaluation increase of the related asset) is
credited to asset revaluation reserve unless it reverses a
previous increase which was recognised in profit and loss.
84 SBS
Fair values for each class of asset are determined as
shown below:
FAIR VALUe
Asset CLAss
MeAsUReD At
Land Market selling price
Buildings excl. leasehold Market selling price
improvements
Leasehold improvements Depreciated replacement
cost
Plant and equipment Market selling price or
Depreciated replacement
cost
(r) Intangibles
The economic entity’s intangibles comprise of goodwill,
contract rights and trademark (recognised on acquisition
of PAN TV Ltd), and software for internal use.
Goodwill
Goodwill is recognised on purchase of a business unit in
accordance with AASB 3 “Business Combinations” – see
Notes 1(t) and 8(c).
Contract rights and trademark
Contract rights are amortised over their anticipated useful
lives (6 years). Trademark is not amortised as it has an
indefinite useful life, but is tested for impairment – see
Note 1(t).
Software
Software is initially recognised at cost and amortised on
a straight-line basis over anticipated useful lives. These
assets are assessed for indications of impairment – see
Note 1(t).
(s) Depreciation and amortisation
Property, plant and equipment, other than freehold land,
is depreciated up to their estimated residual values, over
their estimated useful lives to the economic entity using
the straight line method of depreciation.
Depreciation/amortisation rates (useful lives) and methods
are reviewed each financial year.