​​​​​​​
You are here: Skip breadcrumbAttorney-General's Department >> Publications >> Annual reports >> Annual Report 2015-16 >> Note 3.2: Non-financial assets

Note 3.2: Non-financial assets

Previous page Next page

3.2 Non-financial assets1, 2

3.2A: Reconciliation of the opening and closing balances of property, plant and equipment and intangibles

Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2016

  Land Buildings Leasehold improvements Heritage and cultural3 Other property, plant and equipment Computer software Total
  $'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 July 2015              
Gross book value 1,400 510 68,010 41,723 35,120 63,959 210,722
Accumulated depreciation, amortisation and impairment (20) (7,791) (141) (17,266) (43,165) (68,383)
Total as at 1 July 2015 1,400 490 60,219 41,582 17,854 20,794 142,339
Additions              
By purchase 1,826 123 4,824 6,394 13,167
Internally developed 924 924
Acquisition of entities or operations (including restructuring) 12,284 4,606 3,237 20,127
Revaluations and impairments recognised in other comprehensive income (1,696) 43 (1,653)
Depreciation and amortisation (21) (9,268) (48) (8,205) (9,706) (27,248)
Other movements (21) 118 (190) (72)
Disposals              
From disposal of entities or operations (including restructuring) 1 (2,435) (35,757) (618) (2,311) (41,121)
Other (197) (197)
Total as at 30 June 2016 1,400 469 62,744 4,204 18,117 19,332 106,266
               
Total as at 30 June 2016 represented by              
Gross book value 1,400 510 87,495 4,204 43,337 74,103 211,049
Accumulated depreciation, amortisation and impairment (41) (24,751) (25,220) (54,771) (104,783)
Total as at 30 June 2016 1,400 469 62,744 4,204 18,117 19,332 106,266

 

Notes

1 On 15 December 2014, the Government announced that it would consolidate the Australian Government Solicitor (AGS) within the Attorney-General’s Department with effect from 1 July 2015. Assets and liabilities for the AGS have been consolidated into the Department’s financial statements for the first time in the 2015–16 financial year. As a consequence, both assets and liabilities may be materially different to the comparative shown in the 2014–15 financial year.

2 In accordance with the Administrative Arrangements Order of 21 September 2015, the Classification, Copyright and Arts and Cultural Development programs and functions were transferred to the Department of Communications and the Arts with effect from 1 November 2015. The financial impact is reflected as a disposal in this note.

3 Land, buildings and other property, plant and equipment that met the definition of a heritage and cultural item were disclosed in the heritage and cultural asset class.

Additional disclosures

The carrying amount of computer software included $5.016m purchased software and $14.316m internally developed software.

No indicators of impairment were found for land, buildings, other property, plant and equipment, and intangibles. No land, buildings, other property, plant and equipment and intangibles are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

Land and buildings

All revaluations were undertaken in accordance with the revaluation policy stated at Note 3.2. In 2016, there was a nil increment (2015: nil increment) for buildings on freehold land. In 2016 there was a nil increment (2015: nil increment) for leasehold improvements that were credited to the asset revaluation surplus by asset class and included in the equity section of the balance sheet.

Property, plant and equipment

All revaluations were undertaken in accordance with the revaluation policy stated at Note 3.2. In 2016, there was a $1.654m decrement (2015: nil increment) for heritage and cultural that was credited against the asset revaluation surplus by asset class and included in the equity section of the balance sheet.

All revaluations were undertaken in accordance with the revaluation policy stated at Note 3.2. In 2016, there was a nil increment for property, plant and equipment (2015: $0.94m decrement) that was credited against the asset revaluation surplus by asset class and included in the equity section of the balance sheet.

Reconciliation of the opening and closing balances of property, plant and equipment, and intangibles for 2015

  Land Buildings Leasehold improvements Heritage and cultural1 Other property, plant and equipment Computer software Total
  $'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 July 2014              
Gross book value 1,400 510 64,323 41,101 52,633 54,147 214,114
Accumulated depreciation, amortisation and impairment (77) (33,655) (33,401) (67,133)
Total as at 1 July 2014 1,400 510 64,246 41,101 18,978 20,746 146,981
Additions              
By purchase 3,687 622 5,285 3,869 13,463
Internally developed 5,982 5,982
Acquisition of entities or operations (including restructuring)
Revaluations and impairments recognised in other comprehensive income (94) (94)
Depreciation and amortisation (20) (7,714) (141) (6,298) (9,803) (23,976)
Disposals              
From disposal of entities or operations (including restructuring)
Other (17) (17)
Total as at 30 June 2015 1,400 490 60,219 41,582 17,854 20,794 142,339
Total as at 30 June 2015 represented by              
Gross book value 1,400 510 68,010 41,723 35,120 63,959 210,722
Accumulated depreciation, amortisation and impairment (20) (7,791) (141) (17,266) (43,165) (68,383)
Total as at 30 June 2015 1,400 490 60,219 41,582 (17,854) 20,794 142,339


Note

1 Land, buildings and other property, plant and equipment that met the definition of a heritage and cultural item were disclosed in the heritage and cultural asset class.

Accounting policy

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, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amount at which they were recognised in the transferor agency’s accounts immediately prior to the restructuring.

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the ‘make-good’ cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant in property leases taken up by the Department where there exists an obligation to restore the property to its original condition. These costs are included in the value of leasehold improvements with a corresponding provision for the ‘makegood’ recognised.

Revaluations

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.

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 a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset is restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written off to their estimated residual values over their estimated useful lives to the Department using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

The library assets which have been recognised as heritage assets are not depreciated, and all other library acquisitions are expenses in the year of acquisition.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable departmental asset are based on the following useful lives:

  2016 2015
Buildings on freehold land 25–50 years 25–50 years
Leasehold improvements Lease term Lease term
Property, plant and equipment 3–10 years 3–10 years
Heritage and cultural (where applicable) Up to 480 years Up to 480 years

Impairment

All assets were assessed for impairment at 30 June 2016. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Department were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further economic benefits are expected from its use or disposal.

Heritage and cultural

Heritage and cultural items include items that are of national, historical or cultural significance.

Intangibles

The Department’s intangibles comprise internally developed software and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Department’s intangibles are 3 to 5 years (2014–15: 3 to 5 years).

All software assets were assessed for indications of impairment at 30 June 2016.

3.2B: Other non-financial assets

  Notes 2016 2015
    $'000 $'000
Prepayments    6,907 5,652
Other non-financial assets expected to be recovered      
No more than 12 months   5,472 4,581
More than 12 months   1,435 1,071
Total other non-financial assets   6,907 5,652
No indicators of impairment were found for other non-financial assets.      

Previous page Next page