Toowoomba Regional Council
Notes to the Financial Statements
for the year ended 30 June 2016
Note 1. Significant Accounting Policies (continued)
Any revaluation increment arising on the revaluation
of an asset is credited to the appropriate class of the
asset revaluation surplus, except to the extent it
reverses a revaluation decrement for the class
previously recognised as an expense. A decrease in
the carrying amount on revaluation is charged as an
expense to the extent it exceeds the balance, if any,
in the revaluation surplus of that asset class.
threshold are capitalised and depreciated on the
same basis as the asset to which they relate.
On revaluation, accumulated depreciation is restated
proportionately with the change in the carrying
amount of the asset and any change in the estimate
of remaining useful life.
Depreciation methods, estimated useful lives and
residual values of property, plant and equipment
assets are reviewed at the end of each reporting
period and adjusted where necessary to reflect any
changes in the pattern of consumption, physical wear
and tear, technical or commercial obsolescence, or
management intentions. The condition assessments
performed as part of the annual valuation process for
assets measured at depreciated current replacement
cost are used to estimate the useful lives of these
assets at each reporting date. Details of the range of
estimated useful lives for each class of asset are
shown in note 12.
Separately identified components of assets are
measured on the same basis as the assets to which
they relate.
Capital work in progress
The cost of property, plant and equipment being
constructed by the Council includes the cost of
purchased services, materials, direct labour and an
appropriate proportion of labour overheads.
Depreciation
Land is not depreciated as it has an unlimited useful
life. Depreciation on other property, plant and
equipment assets is calculated on a straight-line
basis so as to write-off the net cost or re-valued
amount of each depreciable asset, less its estimated
residual value, progressively over its estimated
useful life to the Council. Management believe that
the straight-line basis appropriately reflects the
pattern of consumption of all Council assets.
Assets are depreciated from the date of acquisition
or, in respect of internally constructed assets, from
the time an asset is completed and commissioned
ready for use.
Where
assets
have separately identifiable
components that are subject to regular replacement,
these components are assigned useful lives distinct
from the asset to which they relate. Any expenditure
that increases the originally assessed capacity or
service p