KU Annual Report 2010 - Page 24

KU Financial Report Notes to the Financial Statements for the Financial Year Ended 31 December 2010 1. Adoption of new and revised Accounting Standards In the current year, the company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current annual reporting period. 2. Summary of Accounting Policies Statement of compliance The financial report is a general purpose financial report, which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law. Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). A statement of compliance with IFRS cannot be made due to the application of not for profit sector specific requirements contained in the A-IFRS. The financial statements were authorised for issue by the Directors on 29 March 2011. Basis of preparation The financial report has been prepared on the basis of historical cost, except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars. The following significant accounting policies have been adopted in the preparation and presentation of the financial report: a) Going Concern Despite the fact that the company has net current liabilities, on the basis of the points set out below, the directors have concluded that it is appropriate to prepare the financial statements on a going concern basis as: 1. The company continues to generate cash inflows from operations 2. It is the opinion of the directors that the amounts shows as current liabilities will not all be payable in cash within 12 months 3. The company has significant non-current assets carried at cost for which fair value significantly exceeds the carrying amount 4. The company has the ability to manage capital expenditure to ensure funds are available to pay debts as and when they fall due b) Company Limited by Guarantee The company is incorporated as a company limited by guarantee. In accordance with the Constitution every member of the company undertakes to contribute to the assets of the Company in the event of it being wound up, while he/she is a member or within one year after he/she ceases to be a member, the sum of $2. The company has 6,428 members. (2009: 6,433 members) c) Property, plant and equipment Land and buildings, plant, furniture and equipment, motor vehicles and computers are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. Depreciation is provided on plant, furniture and equipment, motor vehicles and computers, including freehold and leasehold buildings but excluding land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. 24 KU Children’s Services