KU Annual Report 2007 - Page 27

3. Critical accounting judgements and key sources of estimation uncertainty There has been a change in the method of recognising income and expenses on a gross rather than a net basis. This has resulted in an additional $11,751,393 of income and expense in the prior year which has had a nil effect on the Income Statement surplus. In the application of A-IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. o) Change in method of recognising income, expense, cash and government funding liability There has been a change in the method of recognising cash and government funding on a gross rather than a net basis. This has resulted in an additional $1,212,342 of cash and government funding liability in the prior year which has had a nil effect on the net asset balance. This also resulted in an additional $13,821,020 of reported cash inflows and cash outflows in the prior year. 4. Surplus from operations a) Revenue The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revisions and future periods if the revision affects both current and future periods. 2007 2006 $ $ Revenue from operations consisted of the following items: Government funding 23,840,275 20,974,464 Parents’ fees 26,587,047 24,853,316 Management fees 10,830,370 8,581,764 Gross fundraising income 913,049 715,355 Interest revenue - bank deposits 426,785 398,205 Dividends received 405,981 563,672 Sales of publications and courses 16,745 8,379 Sponsor support 17,000 17,000 210,280 212,343 - 642,011 567,639 517,440 63,815,171 57,483,949 2,125 (18,496) (488,281) (442,767) (706,132) (612,084) (26,007) (26,057) Rent revenue: Operating lease revenue: Reversal of prior period revaluations on derecognition of ‘available-for-sale’ financial asset Other revenue b) Surplus Surplus has been arrived at after charging the following losses: Gain/(Loss) on disposal of property, plant and equipment Depreciation of non-current assets Operating lease rental expenses: Minimum lease payments Net bad a