Fitzroy Learning Network Annual Report - Page 10

Fitzroy Learning Network Inc. Annual Financial Report For the year ended 30 June 2016 Notes to the Financial Statements Note 3 Significant accounting policies (continued) (f) Revenue (continued) (ii) Donations Donations are receipted into the bank account and comprises amounts received from individuals or commercial institutions. Donations are recorded as revenue either immediately if unspecified or upon completion of specified conditions. (g) Lease payments Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. (h) Interest income Interest income comprises interest income on funds invested. Interest income is recognised as it accrues, using the effective interest method. (i) Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax ("GST"), except where the amount of GST incurred is not recoverable from the Australian Taxation Office ("ATO"). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. (j) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. When part 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. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within other income in surplus or deficit. 8