Toowoomba Regional Council
Notes to the Financial Statements for the year ended 30 June 2017
Note 1 . Significant Accounting Policies ( continued )
1 . h Financial assets and liabilities
Council recognises a financial asset or a financial liability in its Statement of Financial Position when , and only when , Council becomes a party to the contractual provisions of the instrument .
Toowoomba Regional Council has categorised and measured the financial assets and financial liabilities held at balance date as follows :
Financial assets
� Cash and cash equivalents – Note 10 � Receivables - measured at amortised cost less any impairment - Note 1 . i and Note 11 � Investments - Note 10
Financial liabilities � �
Payables - measured at amortised cost - Note 1 . k and Note 15 Borrowings - measured at amortised cost - Note 1 . m and Note 16
Financial assets and financial liabilities are presented separately from each other and offsetting has not been applied .
1 . i Receivables
Trade receivables are recognised at the amounts due at the time of sale or service delivery ( i . e . the agreed purchase price / contract price ). Settlement of these amounts is required within 30 days from invoice date .
The collectability of receivables is assessed periodically and if there is objective evidence that Council will not be able to collect all amounts due , the carrying amount is reduced for impairment .
As Council is empowered under the provisions of the Local Government Act 2009 to sell an owner ' s property to recover outstanding rate debts , Council does not impair any rate receivables .
1 . j Property , Plant & Equipment
Each class of property , plant and equipment is stated at cost or fair value less , where applicable , any accumulated depreciation and accumulated impairment loss . Items of plant and equipment with a total value of less than $ 5,000 , and infrastructure assets and buildings with a total value of less than $ 10,000 are treated as an expense in the year of acquisition . All other items of property , plant and equipment are capitalised .
The classes of property , plant and equipment recognised by the Council are reported in Note 12 .
Acquisition of assets
Acquisitions of assets are initially recorded at cost . Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition , including freight in , architect ' s fees and engineering design fees and all other establishment costs .
Property , plant and equipment received in the form of contributions , are recognised as assets and revenues at fair value by Council valuation where that value exceeds the recognition thresholds for the respective asset class . Fair value is the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date .
Capital and operating expenditure
Direct labour and materials and an appropriate proportion of overheads incurred in the acquisition or construction of assets are treated as capital expenditure . Assets under construction are not depreciated until they are completed and commissioned , at which time they are reclassified from work in progress to the appropriate property , plant and equipment class .
Routine operating maintenance , repair costs and minor renewals to maintain the operational capacity and useful life of the non-current asset is expensed as incurred , while expenditure that relates to replacement of a major component of an asset to maintain its service potential is capitalised .
Valuation
Land and improvements , buildings , and all infrastructure assets are measured on the revaluation basis , at fair value , in accordance with AASB 116 Property , Plant and Equipment and AASB 13 Fair Value Measurement . Other plant and equipment and work in progress are measured at cost .
Annual Report 2016 - 2017 I TOOWOOMBA REGIONAL COUNCIL 47