KU Annual Report 2009 | Page 27

Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that asset’s net carrying amount. i) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. j) Investment property Investment property, which is property held to earn rentals and/or capital appreciation, is carried at cost, including transaction costs. k) Income tax The company is exempt from income tax under s50-5 of the Income Tax Assessment Act, as it is an income tax exempt charitable entity. As a consequence, there is no income tax attributable to the operating result. l) General reserves Fundraising Reserve Net proceeds of fundraising are retained in the Fundraising Reserve. m) Donations in kind Over the course of the year the company has received donations in kind from a number of local councils in the form of the right to use premises at discounted rent. The company is of the view that it is not feasible to fair value the services received accurately and as such it has not brought to account discounted rent as a donation through its income statement. n) Provisions Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. o) Trade & Other Payable Trade payables and other accounts payable are recognised when the company becomes obligated to make future payments resulting from the purchase of goods and services. Other payables represent unspent or unremitted Government funding. 3. Standards and Interpretations issued not yet effective At the date of authorisation of the financial report, the Standards and Interpretations listed below were in issue but not yet effective. Initial application of the following Standards will not affect any of the amounts recognised in the financial report, but will change the disclosures presently made in relation to the Company’s financial report: • AASSB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process • AASSB 2009-8 Amendments to Australian Accounting Standards – Group Cash Settled Share –based Payment Transactions • AASSB 2009-9 Amendments to Australian Accounting Standards – Additional Exemptions for First-time Adopters • AASSB 2009-10 Amendments to Australian Accounting Standards – Classification of Rights Issues • AASSB 2009-14 Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement Continues... 114th Annual Report 2009 27