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 )
( d ) Impairment ( continued ) ( ii ) Non-financial assets The carrying amounts of the Association ’ s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment . If any such indication exists then the asset ’ s recoverable amount is estimated .
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell . Value in use is determined as the depreciated replacement costs of the assets . For the purpose of impairment testing , assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets ( the “ cashgenerating unit ”).
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount . Impairment losses are recognised in profit or loss . Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit ( group of units ) on a pro rata basis .
In respect of other assets , impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists . An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount . An impairment loss is reversed only to the extent that the asset ’ s carrying amount does not exceed the carrying amount that would have been determined , net of depreciation or amortisation , if no impairment loss had been recognised .
( e ) Employee benefits ( i ) Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts . Obligations for contributions to defined contribution plans are recognised as a personnel expense in profit or loss when they are due .
( ii ) Other long-term employee benefits The Association ’ s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior period plus on-costs ; that benefit is
( iii ) Short-term benefits Short-term employee benefit obligations are measured on an undiscounted basis , at the amounts the Association expects to pay , and are expensed as the related service is provided .
( f ) Revenue ( i ) Government funding Revenue from Government funding is recognised in the income statement upon the achievement and progress of specific objectives detailed in the funding agreements .
Grants that compensate the Association for expenses incurred are recognised as revenue in the income statement on a systematic basis in the same periods in which the expenses are incurred . Funding for capital projects is recognised in profit or loss in the financial year in which the work being funded is carried out . Any funding received for services which have not been performed is recorded as deferred income in the balance sheet .
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